Car finance on new cars increased 15
percent by volume in May compared to the same period last
year, with more than half of all buyers using dealer finance,
according to figures released by the Finance & Leasing
Association (FLA).
“Dealers are offering value-for-money deals, which have kept
customers coming through the doors,” said Paul Harrison, head of
Motor Finance at the FLA.
Go deeper with GlobalData
“This has meant that the amount of dealer finance provided to
consumers for new cars has grown by a fifth in the last 12 months
compared with the previous 12-month period.”
Business purchases of new cars on finance also grew by 21
percent by volume in the same period compared with a year
earlier.
It had been feared that the end of the
government’s scrappage scheme—whereby owners of old cars or small
vans were able to trade them in for brand new models with a £2,000
incentive—would lead to a drop off in the number of customers
wanting to buy new cars, sales of which on finance totalled more
than 36,000 in May.
The value of car finance was £485m for May, up
20 percent on last year in terms of value.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFigures on used cars are similar to those of
last year with 52,000 being bought with the help of finance.
Harrison said that dealers of new vehicles should not get
complacent with the news, however. “The first half of the year has
been encouraging for dealers. But we expect to see sales of new
cars on finance drop off later in the year while used car finance
sales will pick up as second-hand stock becomes more
available.”
Commercial Director of buyacar.co.uk Richard Garner has seen the
increase in customers taking finance in his own dealership.
“We have also seen a similar increase in the retail price
customers are paying year-on-year. It appears that manufacturers
believe dealer finance schemes represent a better sales strategy to
promotional retail price discounts,”
“Buying a car on finance works for car buyers because they can
be less sensitive about price as significant differences in the
total cash price of the car only make small differences to the
monthly repayment figure.”
Girish Gupta
