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December sees record rate of growth in dealer finance for new cars
Figures released today by the Finance & Leasing Association show that the number of new cars bought by consumers using dealer finance in December 2009 grew by a record rate of 91% compared to December 2008. In the final quarter of 2009, volumes increased by 56% compared with Q4 2008.
The record rise is mainly due to the consumer rush to beat the VAT increase. Car buyers were able to save £375 on the sales tax on a car costing £15,000. A weak December 2008 performance also contributed to the record growth rate.
New cars bought by consumers using Personal Contract Purchase (PCP) were up in December by 90% and by 8% in 2009 as a whole, reflecting the attraction of this product’s flexible payment options.
Commenting on December’s motor finance figures, Geraldine Kilkelly, Head of Research and Chief Economist, said:
“The growth in the car finance market in the final quarter of the year is encouraging. But the figures for the full year still show a fall in the number of new cars bought by consumers on finance – a situation repeated in the used car finance and business car finance markets.
“Using car finance from the dealer remains a popular option, with 45.8% of private new car sales financed this way. But the UK has only just limped out of recession and with the end of Government incentive schemes, the next few months may see quieter times in the car showrooms.”
Table 1: Cars bought on finance by consumers through dealerships
| Dec 09 | % change | Q4 2009 | % change | 2009 | % change | |
| New cars | ||||||
| Value of advances (£m) | 535 | +83 | 1,606 | +55 | 5,791 | -5 |
| Number of cars | 42,797 | +91 | 127,477 | +56 | 464,983 | -9 |
| Used cars | ||||||
| Value of advances (£m) | 372 | +5 | 1,250 | 0 | 5,489 | -13 |
| Number of cars | 37,675 | -6 | 130,413 | -6 | 611,716 | -11 |
Table 2: Cars bought on finance by businesses
| Dec 09 | % change | Q4 2009 | % change | 2009 | % change | |
| New cars | ||||||
| Number of cars | 22,560 | -18 | 80,614 | -4 | 354,086 | -20 |
| Used cars | ||||||
| Number of cars | 5,282 | +35 | 11,987 | -14 | 46,990 | -15 |
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Note to editors:
- See www.financingyourcar.org.uk for impartial information on finance options for buying a car.
- The FLA is the leading trade association for the motor finance sector in the UK. In 2009 FLA members financed £72 billion of new business. FLA members provided £16.5 billion of motor finance in 2009 and financed more than 50% of all new car registrations in the UK.
For further media information, please contact:
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993