Manufacturer finance houses are starting to fight back against direct lenders and high street banks after several months of losing market share.
The latest figures from the Finance & Leasing Association (FLA) reveal point-of-sale new car finance has made significant gains in the third quarter of the year.
According to the FLA, point-of-sale new car finance to private buyers is growing faster than the new car market as a whole. The number of new cars bought by private customers on finance in September increased by 62% on the same month a year ago. SMMT figures show total new car sales to private customers were up by 29.4%.
The figures for August were equally encouraging, with finance sales to private customers up by 59% when total private car sales were up by 12.5%. New car consumer finance for the first nine months of the year is now 23% ahead of this time last year.
The figures are in marked contrast to earlier in the year when FLA members were losing market share at the point-of-sale and will help justify the heavy promotion by carmakers of discounted finance packages.
Martin Hall, FLA director general, said: "These latest figures indicate consumers are unperturbed by talk of recession and that confidence remains high. Their willingness to buy on credit is no doubt helped by low interest rates and good deals on offer in the showrooms."
But there is less good news for the independent finance companies operating largely in the used car market. Retail used car finance is down by 10% for the first nine months of the year although it held steady in September. Many independent finance companies reported a drop in new business enquiries following the terrorist atrocities on September 11.
The average size of a private customer loan for a new car continues to fall, reflecting reduced list prices, but also hitting finance companies turnover and income figures (see First National profit warning). The figure for September, £8,489, is 3% lower than the same month last year.