The new car finance market grew by 48% by value and 42% by volume in July when compared with July 2011 – the strongest monthly growth so far this year.
The latest motor finance figures from the Finance & Leasing Association show 68.6% of new cars acquired by consumers in the last 12 months were bought using finance sold in dealerships, the highest level since FLA records began.
In July, PCP was the most popular car finance product, accounting for 60% of finance granted. HP accounted for a further 28%, leasing for 7%, and the remaining 5% involved personal loans provided by dealers for new cars.
Paul Harrison, head of motor finance at the FLA, said: "Almost 70% of car buyers – 600,000 people – used finance from the dealer to buy their new car in the last 12 months, showing that it is a vital source of credit for consumers. It allows people access to cars they need to get to work and support their families and lifestyle.
"More than £15bn has been lent by car dealers to consumers in the past 12 months, helping to support the economy. The Government should make sure that the specific needs of this important sector are catered for as it continues to review the future regulation of consumer credit."
FLA data shows 154,214 new and 200,450 used cars were bought on finance in the three months to July.