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Dealer loans hit record 60% share

Point-of-sales loans for new cars in the 12 months to September reached 60%, the highest proportion of the total market since Finance & Leasing Association records began.

Paul Harrison, FLA head of motor finance, said: “This is a testament to the attractiveness of motor finance products and dealers’ knowledge and training in selling finance products.”

FLA data shows that in the year to September the value of point-of-sale advances for new cars totalled £6.608 billion, a similar value to the previous 12 months.

In the year to September there was a 3% fall in the number of people buying new cars on finance so dealer finance has a much higher share of a falling market, says the FLA.

Further proof of the success of loans comes from an online provider with links to a network of 700
independent dealers.

Creditplus says applications for new and used cars this autumn are up 18% year-on-year.

Provisional car finance acceptances have increased by nearly 50%, says the firm. Average loans have risen from £7,068 in 2010 to £7,350, and the average cash deposit by 490% to £1,406.

Shaun Armstrong, managing director, said: “These figures show that asset-backed car finance continues to be extremely popular.

"It has the edge over other purchasing options, as consumers are able to tailor a finance package to suit their budget.”

Creditplus compares more than 30 car finance lenders, claiming to find the best rates available.

It runs an online database of more than 65,000 cars for sale by a network of 700 independent dealers and also offers to find a car for a customer.

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