The proportion of car buyers taking dealer
finance in the past 12 months has risen to 68.6%, the highest since
records began, according to figures from the Finance & Leasing
Association (FLA).

The 12-month rate, which is up for the
16th month in a row, includes July’s new car finance
market year-on-year growth of 48% by value, to £681m, and 42% by
volume, to 48,772 units. Used car finance was also up, 11% by
value, to £628m, and 12% by volume, to 68,554 units.

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Month-on-month, however, the new car finance
market in July was down 11% by value and 8% by volume. By contrast,
used car finance rose compared to June, 11% by value and 10% by
volume.

The figures continue to show a rise in overall
retail car finance, which has continued to rise since March 2011,
up
0.7 percentage points on June, itself up
0.5 points from May.

‘Specific needs’

Paul Harrison, head of motor finance at the
FLA, took pride in the £15bn-plus which the organisation’s figures
show has been lent to 600,000 people in the past 12 months and
called on the government to “make sure that the specific needs of
this important sector are catered for as it continues to review the

future regulation of consumer credit”.

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Longer term, the value of new car finance in
the three months to July is up by 40% year-on-year, and up over the
year to July by 26%. Over the same periods, used car finance has
grown 5% as
finance has afforded customers the opportunity to purchase new
cars and the
lack of supply of quality stock has pushed up the prices of used
cars.

The situation is, largely, the other way
around in fleet and business sales where the number of new cars
purchased on finance dropped 4% year-on-year by volume in July but
used cars rose 42% and by 88% (to 22,791 units) in the three-month
period to July.

richard.brown@vrlfinancialnews.com