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Car buyers' use of dealer finance continues to grow

The number of car buyers choosing to use dealer finance to purchase their new and used cars is continuing to grow.

According to new figures from the Finance & Leasing Association, consumer demand for new car finance grew for the eighth consecutive month in April.

During the month, dealer finance provided to consumers for new cars was 20% higher than in April 2009.

April is the first month since the beginning of 2009 where the figures have not been artificially boosted by Government incentives and so the latest figures give a truer picture of underlying demand for car finance.

 

Although dealer finance is still not back to pre-recession levels - this April 17% less credit was provided to consumers than in April two years earlier - there is cause for optimism.

The rise in the number of new and used cars bought in April, 16% and 6% respectively, shows that there is still demand in the motor market and that consumers are confident about committing to car purchases and loan repayments in the coming months and years.

"These figures are good news for dealers and finance providers, especially since the drop in demand that we saw in other countries when scrappage schemes ended, has not been repeated in the UK," said Paul Harrison, the FLA's head of motor finance.

"Both new and used car finance sales were positive in April. But we expect to see sales of new cars declining in the second half of the year as consumers return to the used car market as the stock of used car increases."


 

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