Car dealers enjoyed a good
September, with Finance and Leasing Association (FLA) statistics
showing increases in new and used car finance compared to September
last year.
New car sales to consumers
using dealer finance was up by 5%, despite an almost 19% fall in
private new car sales in September, compared to September last
year. Used car finance continued its upward trend, climbing by
6%.
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New car sales to consumers
using dealer finance over the 12 months to September rose by 2.1%,
from 47.5% in August to 49.6%.
Despite growth in the
consumer market, business usage of financing for cars dropped by
17% for new cars, and by 4% for used cars.
FLA head of motor finance
Paul Harrison said: “The rise in the use of motor finance is great
news in such an uncertain and volatile economic climate. Over the
year, we have seen ups and downs in the number of people using
dealer finance for both new and used cars, so it is encouraging to
see a strong performance. But we still have some concern about the
business car sector. Businesses are still cautious about
investment; this is likely to continue.”
The increased use of car
finance, despite the large drop in total private new car sales, was
explained by the FSA’s head of communications Russell
Hamblin-Boone.
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By GlobalData“Much of this trend is due to the scrappage scheme,” he
explained. “Last year, people were trading in their old cars and
using cash to buy smaller new cars, and financial concerns made
customers less confident about committing themselves to motor
finance agreements. In comparison, this year more people feel
comfortable taking out motor finance and are taking advantage of
the great deals available ahead of the VAT rise in
January.”
