News
Good value finance supports two-thirds of showroom motor sales
In the new car finance market, the purchase of 66.6% of new cars by consumers over the last 12 months was supported by finance sold in dealerships, according to new figures from the Finance & Leasing Association, the trade body representing the motor finance industry.
New car sales on finance grew 41% by value and 29% by volume in April compared with April 2011. There was also encouraging news in the used car market, where the number of cars financed was up by 17% in April and the value of finance by 12%.
Hire purchase remained the most popular way to finance a used car and accounted for 64.6% of all consumer used car finance written over the past year.1 Personal contract purchases a viable option, now make up 20.8% of the used car finance market, personal loans from car dealers (not secured on the vehicle) 14.3% and leases 0.3%.
Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented:
“Incentives from dealers and finance companies supported significant growth in new car finance in 2012, and a record two-thirds of all consumer sales. The wide range of innovative finance products seen in the new car market are increasingly available to used car customers, and that has helped to revitalise the market. Around a quarter of consumer used car sales are now bought using dealer finance.”2
Table 1: Cars bought on finance by consumers through dealerships
| Apr 2012 | % change on prev. year | 3 months to Apr 2012 | % change on prev. year | 12 months to Apr 2012 | % change on prev. year | |
| New cars | ||||||
| Value of advances (£m) | 709 | +41 | 2,589 | +34 | 7,722 | +17 |
| Number of cars | 49,709 | +29 | 184,792 | +23 | 563,061 | +11 |
| Used cars | ||||||
| Value of advances (£m) | 600 | +12 | 1,875 | +6 | 6,923 | +6 |
| Number of cars | 66,240 | +17 | 206,961 | +10 | 756,481 | +8 |
Table 2: Cars bought on finance by businesses
|
| Apr 2012 | % change on prev. year | 3 months to Apr 2012 | % change on prev. year | 12 months to Apr 2012 | % change on prev. year |
| New cars | ||||||
| Number of cars | 40,977 | +23 | 104,818 | +10 | 391,305 | +6 |
| Used cars | ||||||
| Number of cars | 3,624 | -15 | 11,986 | +4 | 46,332 | +8 |
- ends -
Note to editors:
- Please see www.FinancingYourCar.org.uk for an explanation of how the different motor finance products work.
- Around 25% of used car sales are purchased using dealer finance. This is lower than in the new car market because used cars generally have lower values and so a higher proportion is bought with cash savings.
- The FLA is the leading trade association for the motor finance sector in the UK. FLA members provided £19.9 billion of motor finance in 2011 and financed 64% of all private new car registrations in the UK.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993