Another substantial increase in showroom finance for new retail cars has prompted the Finance & Leasing Association to welcome consumer credit regulatory reform, but with reservations.
In January, the volume of new cars bought with loans offered through dealerships was 28% higher year-on-year.
FLA members’ penetration of retail car first registrations in the 12 months to January was 71.6%, up from 71.2% in December.
Stephen Sklaroff, FLA director general, described Government acceptance of a need for a new regulatory regime for UK consumer credit as “gratifying”.
The deadline is April 2014 for a structure proportionate to motor finance and other kinds of lending, and Sklaroff said: “The speed with which they intend writing the new rules gives us cause for concern.”
Sklaroff said the consumer credit market contributes an annual £260bn to the economy.
“Tens of thousands of motor dealers, high street stores and lenders providing credit need a realistic time frame to prepare for the new regime,” he said.
Used car advances increase
All measures of dealer finance, for used as well as new cars, rose in January.
Lenders’ dealer partners advanced £613m – a rise of 32% year-on-year. In the year £9.555bn (35% better) financed 641,449 cars (27% up).
The FLA says loans to retail buyers of used cars improved by 12% to £658m in January. For the year to January £7.333bn (up 8%) was loaned on 791,832 cars (7% higher).
Business car loans rise 12%
Loans to businesses to acquire cars via dealers recovered in January after year-on-year falls in December.
The year started with a 12% rise to 33,215 new cars, and a 20% improvement to 4,712 used.