Franchised dealers have been given the best possible incentive to go all out for new car showroom loans this year with the news that penetration reached 61.5% in the year to last November.
The Finance & Leasing Association’s latest figures show that point-of-sale motor finance was almost 10 percentage points up from November 2010.
Demand from car buyers for dealer finance led to a year-on–year growth of 6% in the number of new cars bought in November, says the FLA.
There was a rise of 4% in used car sales over the same period.
Paul Harrison, FLA head of motor finance, said: “Our figures highlight just how important finance sold in dealerships has become in helping people to buy new and used cars.
"Showrooms are the first choice for buyers because of the range and flexibility of the products on offer.”
Harrison said that this year consumer confidence would be more important than ever to the performance of the motor finance sector.
“The secured nature of car finance means lenders can continue to offer some of the best deals for people looking to buy or lease a car,” he added.
FLA data shows that showroom loans for 38,360 new cars in November were worth £539 million, 11% up on the previous November.
The value of new-car loans for the previous quarter was up 12% and there was a 3% gain over the previous 12-month period.
The value of advances to buy used cars also grew – by 2% in November, by 4% in the quarter and by 3% year-on-year.
The FLA has never predicted growth in point-of-sale loans, but hopes the new high share of the market can be sustained.