Finance for new cars rises 27 per cent

The UK car dealer industry continues to go from strength to strength, with recent figures showing a 27 per cent year-on-year rise in new car finance deals.

The data, produced by the Finance & Leasing Association (FLA), also indicates that point-of-sale finance deals approached £2 billion in February 2016. This was spent on over 160,000 new and used cars bought in the UK.

The easier access to finance and increased sales of both new and used cars means that it’s even more important that you offer clients an excellent experience in the showroom. Also your general motor trade insurance, you should also consider adequate levels of demonstration cover to provide test drives upon request.

Growth in the new car finance industry continued in other areas too, including Personal Contract Purchases (PCP), which rose three per cent to take a 76 per cent share of the new car market. In the used car segment, PCP accounted for 39 per cent of the market — a rise of five per cent.

For the first time, new business for market passed the 1 million milestones for the year, most of which was secured with finance. New business advances totalled £806 million on 51,207 new cars while used car advances reached £1,163 million on some 109,305 vehicles.

Geraldine Kilkelly, the head of research and chief economist at the FLA, said: “February saw the point-of-sale consumer new car finance market report its twelfth consecutive month of growth in new business volumes.

“For the first time on record, annual new business volumes in this market surpassed the 1 million mark, with the majority of these purchased on finance secured against the car.”