Huge surge in popularity for in-house car finance

Brits are turning to in-house car finance products such as Personal Contract Purchase (PCP) plans in record numbers.

New figures from the car supermarket giant Motorpoint show demand for point of sale finance packages, like Boomerang, are up 53.3% last month on the same period last year, as motorists look to lease rather than buy their vehicles to avoid being caught out by the continued fall in used car prices.

Launched in 1999 in partnership with Blackhorse Motor Finance, Boomerang has transformed the way in which people buy cars, combining low deposits with low monthly payments over either two or three years together with the security of a guaranteed minimum future value for their vehicle. Today, in-house finance provides funding for one in four sales at Motorpoint.

PCP is proving to be particularly popular in South Wales, where take up increased over 110%. This was followed closely by Scotland and the North West, which went up by 100%. The Midlands saw a more modest rise of 23%.

Sales have been significantly aided by recent headline offers such as a nearly new Vauxhall Vectra 1.8i Life for £81 a month on PCP (or £2.71 a day – less than a large Cappuccino from Starbucks), which helped the company to sell 25 vehicles in as many minutes through its website – motorpoint.co.uk.

By contrast, demand for more traditional finance products like HP, appears to have peaked, up only 8% year on year last month.

Says Paul Winfield, Operations Director at Motorpoint: “It is little wonder that Boomerang has proved so popular. Simple to understand, and even easier to organise, it is the perfect way for the modern customer to finance their next vehicle.

“Plus, not only does it protect them against the threat of negative equity through its guaranteed future minimum value but it also comes with low deposits and equally low monthly payments, music to people’s ears especially during the current credit crunch.”