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Good value finance supports two thirds of showroom sales - 09/07/2012

Good value finance supports two thirds of showroom sales

Almost 67% of new cars bought by consumers over the last 12 months were supported by finance sold in dealerships, new figures from the Finance & Leasing Association show.

New car sales on finance grew 41% by value (to £709 million) and 29% by volume (to 49,709 cars) in April compared with April 2011. Compared to the first four months of last year, the value of advances has increased by 17% to £7.7 billion for the January to July period.

There was also encouraging news in the used car market, where the number of cars financed was up by 17% in April to 66,240 and the value of finance by 12% to £600m.

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. Personal Contract Purchase plans now make up 20.8% of the used car finance market, personal loans from dealerships (not secured on the vehicle) 14.3% and leases 0.3%.

“Incentives from dealers and finance companies supported significant growth in new car finance in 2012, and a record two-thirds of all consumer sales,” Paul Harrison, the FLA’s head of motor finance, said. “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.”