A growing number of car buyers are using motor finance deals to buy new and used cars, according to the latest motor finance statistics.
The number of new cars sold on finance in February was 29% higher than in February 2009, although sales were sluggish in the first two months of last year.
New cars purchased using motor finance remained strong with the market growing by 49% in the last three months compared with the same period 12 months ago.
Volumes of used cars sold to car buyers using motor finance deals grew by 3%, and values by 11% in February.
In the used car market, only four of the past 18 months have seen any growth when compared with the same month a year earlier, according to the Finance & Leasing Association
"It is a sign of increased consumer confidence that both the new and used motor finance markets are up,” said Paul Harrison, head of motor finance at the FLA.
“We may well be seeing a return to a more settled car-buying pattern as Government incentive schemes come to an end.
"We expect growth to continue into March, particularly as many customers will have delayed buying a new car and waited for the release of the ‘10' registration plate.
"Many customers buying new cars, will use their old car as part exchange, which could give a timely boost to the supply of used cars in the market over the next few months."
However, a recent HPI survey found that only 11% of car buyers it surveyed would take out finance through a dealer and 56% of those looking for dealer finance stated that the rates weren’t competitive.
The survey also showed that 52% of those respondents that were actively looking for finance believed there were less finance options available to them.
This is particularly worrying given 74% of those car buyers surveyed said they were not worried about using credit for their next car purchase, demonstrating there is a market there.
HPI also found that only 11% of car buyers it surveyed would take out finance through a dealer and 56% of those looking for dealer finance stated that the rates weren’t competitive.
Most of the respondents (77%) confirmed that competitive rates are the most important factor when offered finance from a dealer.
“Unfortunately car finance through dealerships has gained a reputation as being uncompetitive and a general lack of its availability is putting buyers off turning to dealers," said comments Daniel Burgess, automotive director of HPI.
"This is to be expected when you take into consideration that high profile lenders have moved away from this market in recent months."
HPI said its Finance Gateway can help dealers take advantage of this market.