2011 a bumper year for dealer finance

20/02/2012

New figures reveal that 62.9% of all new cars were purchased through dealer finance in 2011.

The effects of the recession, including the news that household budgets face a ‘10-year squeeze’ according to the Institute for Fiscal Studies (IFS), have seen an increasing amount of drivers turn to dealer finance to fund their dream vehicle purchases.

The Finance & Leasing Association, the trade body for the motor finance industry, show that the figure for 2011 is almost 10% higher than figures for the same period in 2010.

The purchase of new cars via dealer finance reached numbers totalling almost 517,500. Dealer finance came to the aid of used car purchasers at a figure of 729,000, a 4% increase from 2010.

The total percentage of consumer car finance through PCP (Personal Contract Purchase) contracts also climbed in 2011, to 61.1% in comparison to the 2010 figure of 58.7%.While PCP contracts grew, hire purchase contracts dipped from a 34% market share in 2010 to a 30.4% market share in 2011. Consumer car leasing made up 6.5% of the market and this sector has made a continuous growth in year on year comparisons.

The market percentage held by Business car finance took a 2% fall in 2011 compared with 2010. However, the last three months of 2011 saw an increase of 6% in the new car finance market against the same quarter in 2010.

Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented;

"Despite some of the gloomy headlines on retail confidence, in 2011 growth in the car finance market was driven by consumers. Value-for-money offers and flexible finance deals have attracted customers to showrooms and led to an almost ten percentage point increase (to 62.9%) in the popularity of forecourt finance for new cars.

"Consumers are looking for finance that suits their budget, and the importance of affordability is shown by the numbers of consumers turning to leasing or personal contract purchase."

Written by

Back to News

Car Loan 4U is authorised and regulated by the Financial Services Authority, and licensed by the office of fair trading under the consumer credit act 1974. Licensed Credit Broker. All finance is subject to status and income. Written Quotation on request.

Registered office: Car Loan 4U Ltd, Winterton House, Winterton Way, Macclesfield, Cheshire, SK11 0LP. Registered in the UK. Tel: 0871 220 6007