Brokers are set to see a boom in finance business during 2017 according to the results of a survey carried out by Cap HPI.
The vast majority of dealers, 68%, told Cap HPI that they expect to see a growth in broker sales of PCH to alleviate the pressure of retail targets in 2017.
Philip Nothard, retail and consumer specialist at Cap HPI, said: “We need to be clear, that not all manufacturers count PCH business towards target.
“There is the prospect for lots of cheap contract hire deals to hit the market in Q1 as manufacturers pursue retail targets.
“Pre-reg or tactical registrations will remain and continue to exert pressure on nearly new values. We expect PCH to increase across the board as it continues to prove attractive option to motorists.”
The trend is supported by recent figures from the Finance & Leasing Association (FLA), which reported that consumer car finance market grew 12% by value and 8% by volume in 2016.
The percentage of private new car sales financed by FLA members through the POS reached 86.6% in 2016, up from 81.4% in 2015, with new business volumes reaching 2.3 million cars.
Nothard said: “The taxation changes could provide a sales boost. A Cap HPI survey of dealers showed 48% expect sales in March to increase on last year.
“It is clear that many manufacturers increased retail targets on an already record 2016. These vehicles will increasingly use a diverse range of channels to reach market.”
ContractHireAndLeasing.com reported that personal contract hire (PCH) is growing at an incredible rate as more and more consumers are turning their back on hire purchase (HP) and choosing to lease their cars instead.
The value of the leasing sector grew by 41.8% in 2016 to £1,523 million, up from £1,074 million in 2015.
PCH, commonly known as leasing, now accounts for 8% of the new car finance market, according to the latest figures from the FLA.
Top 5 most popular models by search on ContractHireAndLeasing.com:
• VW Golf
• Mercedes-Benz C Class
• Audi A3
• BMW 3 Series
• Range Rover Evoque
Top 5 enquired hybrid on ContractHireAndLeasing.com:
• Mitsubishi Outlander
• BMW 3 Series
• Mercedes C Class
• Hyundai Ioniq
• Kia Niro