Just over half, 52.1%, of new cars bought last year were bought using dealer motor finance.
According to the latest statistics from the Finance & Leasing Association, the trade body for the motor finance industry, dealer motor finance grew in popularity during 2010 compared to 2009, when only 45.8% of new cars were bought using dealer finance.
In 2010, half a million people used dealer finance to buy a new car, and motor lenders provided £6.4 billion of funds. In the used car market, motor finance helped 635,000 people to buy a car, with £5.9 billion in advances.
Paul Harrison, FLA head of motor finance, said: “Overall, the number of cars financed last year was up by 4% across all markets as buyers took advantage of the competitive deals on offer.
“However, while dealers had a good year in 2010, they are cautious about the future.
“We had previously forecast that the VAT rise in January might lead to a rush of sales in December, as consumers tried to beat the rise, as it did ahead of the VAT increase in January 2009.
“However, this did not happen. Consumer confidence is at its lowest for around two years, and this is reflected in December’s figures, which showed a fall in the total number of new cars bought using dealer finance, while used car sales were flat.”