The number of customers that bought new cars on dealer finance rose by 26% in the first half of this year with 264,377 taking the plunge, representing 49.4% of all new cars sold.
According to the Finance & Leasing Association, 57% of dealer finance by value was provided through a Personal Contract Purchase (PCP) deal.
Business purchases of new cars were also up, by 15% in Q2 2010 compared with Q2 2009. Businesses have begun to replace old fleets, whose useful life had been extended because of the recession.
Paul Harrison, head of motor finance, said: “The first half of 2010 has been very positive for dealer finance.
"We do expect consumer demand to reduce in the next few months but November and December is likely to see a pick up in demand as customers rush to buy new cars before the increase in VAT to 20% affects prices.”