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Growth in PCP motor finance deals in August

10th October 2013 Print

New business volumes in the consumer new car market were up 20% in August, and used car finance volumes 17% higher than the same month in the previous year, according to figures released by the Finance & Leasing Association (FLA).

August was a particularly strong month for personal contract purchase (PCP) agreements, which grew 54% by value to £432 million in the new car finance market, and 46% to £198 million in the used car finance market. By contrast, hire purchase (HP) grew by 1% in the new car market to £124 million and by 21% to £485 million in the used car market.
FLA members' penetration of the private new car registrations market was 74.5%, up from 74.1% in July.
Commenting, Paul Harrison, Head of Motor Finance at the FLA said: "The increase in the proportion of sales using products like personal contact purchase (PCP) shows that many customers are sensibly choosing to finance their purchases in a way which is both affordable and flexible. Credit options like PCP are proving popular as customers benefit from fixed monthly repayments and can decide at the end of the deal if they wish to own or return the car.
"These finance deals are secured against the car itself which means greater protection for consumers and lenders."