Dealers face a new finance challenge from Tesco, which plans banks in 30 stores by December.
The concept has been tested in Glasgow for three years and its stores in Bristol, Blackpool and Coventry start selling financial products this spring.
Paul Harrison, Finance & Leasing Association head of motor finance, said 53% of buyers of new cars now use point-of-sale finance.
“Its flexibility when buying new and used cars has remained attractive to customers during the economic downturn,” he said.
“The specialist motor finance market is highly competitive which reflects the attractive rates.”
Tesco tested the potential of the finance sector in partnership with the Royal Bank of Scotland.
In February Tesco’s share of UK grocery spending fell to a three-year low because of competition from value chains.
Now it plans to lift profits from around £400 million to £1 billion through its retailing services division, which includes internet sales, Tesco Telecoms and in-store banks.
The Glasgow store offers loans, credit cards, insurance and terminals for its price-comparison service. Current accounts within two years and mortgages later are likely as the network expands.