The latest statistics from the Finance and Leasing Association show that in the year to June 2008, 50% of all new car purchases were bought using dealers' motor finance.
This is up from 46.2% a year ago.
The FLA said dealer finance continues to be an attractive option for car buyers as consumers find it more difficult to get credit elsewhere.
Because finance agreements are usually secured against the car, rather than rate-for-risk finance, this enables specialist motor finance providers to offer more flexible terms and a wider range of products in showrooms to help consumers cope with current conditions.
Many buyers opt for traditional hire purchase, but FLA figures show that both leasing and PCP have also proved very popular over the past 12 months – up by 27% and 18% respectively over this period.
The FLA figures came as Intelligent Finance, the online arm of HBOS, said it would stop offering credit cards and personal loans from next month.