Dealers are being warned not to risk inadvertently pushing their customers into negative equity during the expected September sales surge.
Motor finance provider Singer & Friedlander is warning dealers to think longterm despite the increase in trade.
"With residual values decreasing at a faster rate, longterm financial deals could result in the buyer being in negative equity," said Miles Roberts, of Singer & Friedlander. "Dealers are up against competition from direct lenders, but by making consumers aware of the dangers of longterm financial commitments and making shorter, but just as competitive offers, dealers will still be able to capitalise on finance deals to secure car sales.
"The current growth in the new car market not only points towards a big increase with the plate change, but it also indicates buyers are feeling confident. Dealers should be taking advantage of this by not only speaking to their regular customer base, but also working to keep the new trade it will bring."