There are fewer people using motor finance to buy a car, but those who do are buying more expensive cars, according to the latest data from the Finance and Leasing Association.
The FLA motor finance statistics for July 2010 show that the number of cars financed was down 7%, but the loans advanced against those cars was up 6% compared with finance sales for July 2009.
Both the value of advances and the number of used cars sold on finance grew in July, but the discrepancies seen in the growth rates reinforce the trend seen in the new car market.
While the number of used cars bought on motor finance has gone up by just 1%, the value of cars financed has gone up by 6%, revealing that here too, people are buying more expensive cars.
Paul Harrison, head of motor finance, said:
"Last year, the scrappage scheme encouraged motorists to buy cars. And the cars they were buying tended to be smaller, basic models and were often bought with cash.
"This year, the people who are buying cars are using motor finance to buy more expensive, often prestige cars. Those buyers are likely to be in secure jobs unaffected by the recession, and so have the confidence and income to commit to buying a car.
"The drop in the number of cars sold is not unexpected. We have said previously that there is likely to be a drop in the number of cars sold in Q3 of 2010, before business picks up again towards the end of the year as people aim to beat the VAT rise to 20% on 4 January."