Almost £1bn worth of new car finance was sold in January, according to figures released by the Finance & Leasing Association (FLA).
The total value of advances sold was £995m, which was 20% higher than the amount sold in the same month in 2015.
59,990 new cars were sold on finance in the period, a 14% year-on-year growth.
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As a result of the growth, finance penetration again increased. For the twelve months to January, 81.7% of private new cars sold through dealerships involved finance. This was up from 81.4% for the 12 months to December 2015.
Finance also grew in the used car sector. 104,864 used cars were sold on finance in January, up 12% year-on-year. The value of advances for the month reached £1,093m, up 15% year-on-year.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: "These figures show a strong start to 2016 for the point-of-sale consumer car finance market. The recent growth in this market has to a large extent mirrored a reduction in the use of unsecured personal loans, while also reflecting changing consumer attitudes towards car ownership.
"The increase in popularity of personal contract purchase and hire purchase means that the majority of car finance taken out by consumers is secured against the car."
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By GlobalData
