Car finance applications, including Personal Contract Purchase (PCP) and Hire Purchase (HP), rose by 13% month-on-month in March as the new ‘22’ plate launched, marking the highest rate in March since 2019, according to Experian.
A surge in car deal searches has returned high levels of car finance applications following a turbulent two years during the pandemic, the credit reporting company said.
The low availability of new cars has driven used car prices to grow at exponential rates, meaning many consumers could be overpaying for their new vehicles. Used car prices rose by 28% in the first 11 months of 2021, according to Indicata, and car loan amounts have grown by 14%.
Against this backdrop, fuel prices also continue to soar. The latest figures from Experian Catalist show the average cost of a litre of petrol is 163.6p and 177.3p a litre for diesel, up 37% from March last year, according to the average reported cost of a litre of petrol and diesel at UK forecourts on 27th March 2022 and 28th March 2021.
John Webb, a consumer affairs executive at Experian, said: “We’re all eager to resume some normality, whether that’s returning to the work commute or travelling further to see family and friends. This is leading to an increase in demand for new cars.”
In November 2021, Close Brothers Motor Finance launched an underwriting platform, in partnership with credit reporting firm Experian.
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In a statement, Close Brothers said: “The enhanced platform will store data in one place to enable lending decisions to be automated.”