Total car finance, wholesale and retail, rose approximately 20% year-on-year by volume in Q2, according to Experian Automotive.

The credit reference agency and information provider recorded a 20.45% increase in the number of people taking finance on new cars in the second quarter, to 883,018 agreements, and an 18.20% increase to 747,601 agreements on used cars.

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Hire purchase remained the most popular consumer choice for finance with 191,012 agreements (up 28.88%) in place in the new market in Q2, and 232,094 agreements (up 15.30%) in the used market. However, PCP has continued to prove one of the fastest-growing retail products on offer; up 34.14% to 98,038 agreements on new cars, and up 47.96% to 22,407 agreements on used cars.

Personal loans saw an annual decline by volume in both the new and used market, down 22.96% to 8,276 agreements and down 11.26% to 12,680 agreements, respectively. Leasing also fell year-on-year in the new market, as did conditional sale and credit sale products in the used market.

Andrew Ballard, principal consultant at Experian’s automotive business, told Motor Finance: "Today’s car buyers are doing their research into which form of finance is firstly the most affordable and best value and secondly the most suited to their financial situation."

Used market

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Meanwhile, 1,804,871 used cars were sold during the quarter, up 4.53%, the first year-on-year increase in sales during Q2 since Experian began its records in 2005.

In particular, the Supermini segment, which includes the Vauxhall Corsa and Ford Fiesta, was up by 7.58% to 586,249 sales.

"The four-year high seen in Q2 is a positive sign," said Ballard. "Sales are clearly being driven by the popular Supermini segment and it now accounts for a third of all the used cars sold in the UK."

Further data and analysis from Experian will be published in the September issue of Motor Finance magazine.

richard.brown@timetric.com