Nearly two-thirds of new cars sold in February were purchased
using dealer consumer finance, breaking previous records.
February also saw a 15% increase in the number new cars financed
compared to the same period in 2011, according to data from motor
finance body the Finance & Leasing Association (FLA), which
attributed the growth to the range and flexibility of finance
products available
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The three main types of dealer finance – hire purchase (HP),
leasing, and personal contract purchase (PCP) – also grew
year-on-year in February 2012, with PCP accounting for almost
two-thirds of the new car finance market at 60%.
Leasing showed the highest rate of growth for financing new
cars, at 50%, but only accounted for a total of less than 10% of
the market.
The value of advances for the month was £345m, up 29% from the
previous year.
Meanwhile, in the used car market there was a 9% rise in cars
bought on dealer finance in February year-on-year.
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By GlobalDataFor the 12 months to February HP was still the most popular
product for financing used cars – accounting for 65%. PCP accounted
for 21%, personal loans made up 14% and leasing remained low at
0.3%.
Paul Harrison, head of motor finance at the FLA, said: “The
flexibility offered by car finance means that a deal can be found
to suit almost every budget. These figures are encouraging for
dealers, lenders and motor manufacturers ahead of the figures for
the important month of March.”
