Half of new car sales bought using dealer finance

The latest statistics from the Finance and Leasing Association show that in the year to June 2008, 50 per cent of all new car purchases were bought using point-of-sale (dealer) motor finance. This is up from 46.2 per cent a year ago.

Dealer finance continues to be an attractive option for car buyers as consumers find it more difficult to get credit elsewhere. Finance agreements are usually secured against the car, which enables specialist motor finance providers to offer more flexible terms and a wider range of products in showrooms to help consumers cope with current conditions.

Many buyers opt for traditional hire purchase, but FLA figures show that both leasing and Personal Contract Purchase (PCP) have also proved very popular over the past 12 months – up by 27% and 18% respectively over this period.

People who are thinking of buying a new car in September - when the ‘58’ plate is released - should make sure they consider the competitive finance packages available via their local dealerships. The FLA’s FinancingYourCar.org.uk provides a useful guide to car buyers on the different finance options available to them, and there is even a ‘finance decider’ tool to advise people on which product best suits their personal circumstances.