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Surge in new car finance

Dealers fought back from the effects of the recession in November to achieve sharp increases in the volume of new cars sold with the help of point-of-sale finance.

Data from the Finance and Leasing Association shows that 40,734 new cars were bought by retail cust-
omers – an 81% year on year increase – thanks to advances totaling £515 million, an increase of 79%.

The scrappage scheme was a major reason for the improvement.

November 2008 was a low point for the industry as the credit squeeze gripped tighter. But finance companies and their dealers are heartened by the improvement.

In the three months to November 156,542 new retail cars were sold on finance (25% up year-on-year), with advances totaling £2.03 billion (28% higher).

The figures for the 12 months to last November show declines in volume (by 15% to 426,221) and value of advances (by 11% to £5.548 billion).

The used car sector did less well. Advances in November were up 5% to £421 million and volume by 4% to 44,260.

But the three months to November showed declines (advances by 5% to £1.379 billion) and volume
(by 10% to 143,622).

In the year to November advances dropped by 14% to £5.47 billion and volume by 11% to 614,296).

There was no change in the number of new business cars bought in November, or in the three months to it, but the volume for the year to November was 19% lower at 359,826.

There were sharp falls in the volumes of used cars sold to businesses on finance – by 43% to 2,875 in November; by 25% to 10,972 in the months to November; and by 22% to 46,407 in the year to that month.

 

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