Car finance sales figures for March were
better than expected, with the total value of finance sold rising
1% year-on-year despite the number of vehicles financed being down
5% on March 2010. However, the large number of vehicles financed in
March 2010 (up 40% on March 2009) was in part boosted by the
scrappage scheme.
March’s monthly statistics will be the last
distorted by scrappage, since the scheme came to an end at the end
of March 2010.
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While the total value of used car finance has
been up year-on-year for several months, March 2011 saw it drop 3%
compared to the previous year. However, in the first quarter of
2011 as a whole, the total value and volume of used car finance
sold was 3% higher year-on-year.
Penetration of finance into the car retail
market continues to strengthen – in the 12 months to March, more
than 54% of consumers took out finance with UK lenders, up 1.6
percentage points on February’s figure.
Business new car finance volumes fell 8% in
March, and 5% in the first quarter of the year, compared to the
same period in 2010, indicating that business confidence remains
fragile, with many firms extending their agreement terms rather
than investing in new vehicles. However, business demand for motor
finance is not as closely linked to number plate changes as private
purchases.
FLA head of motor finance Paul Harrison said:
“It was a mixed month for dealers – the proportion of cars sold and
the value of loans rose once again, although the actual number of
vehicles sold on finance fell. But with consumer’s budgets
continuing to be squeezed, the growth in the value of finance was
unexpected and March’s figures have been welcomed by motor finance
providers.
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By GlobalData“Dealer finance is once again the finance
option of choice. However, customer retention is vitally important
in tough economic conditions. Flexible finance agreements – such as
personal contract purchase – are helping customer affordability and
initiatives such as the FLA’s Specialist Automotive Finance are
delivering improved financial information in showrooms.”
