Traditionally ‘slower
month’ also affected by January rush to beat VAT
hike.

Table showing cars bought on finance by consumers through dealerships

The number of new cars bought
on finance by consumers through dealerships in February was down
14% compared with the same month 2010, according to the Finance
& Leasing Association (FLA). Used car sales purchased on
finance were flat in February compared to the same month last
year.

Though at first glance the
figures may appear disappointing, they are the product of a
traditionally slow month, prior to a plate change, and follow an
exceptionally good January when dealers were offering compensatory
bargains after the increase in VAT.

Business investment in new
fleet vehicles was also down, falling 16% in February compared to
February 2010. Sales of used cars to businesses were down even more
dramatically, by 43% compared to February last year.

The three-months-to-February
figures continue to show the trend previously identified – that
consumers are buying fewer new cars, while used car sales are up,
in line with the general austerity of the times.

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By GlobalData

The year-to-February figures,
though, clearly show that consumer sales of both new and used cars
are significantly higher than they were a year earlier.

FLA head of motor finance
Paul Harrison said: “January was an unexpectedly strong month for
car finance sales, as dealerships offered good deals on interest
rates to help buyers offset the impact of the VAT rise to
20%.”

“February is traditionally a
slower month for dealerships, as people thinking about buying a new
car may want to wait until March for the new plates.”