Motor dealer finance under pressure in January

The latest statistics released by the Finance and Leasing Association show the impact of the recession on motor finance providers in the UK.

Consumers purchased 29% fewer new cars and 13% fewer used cars with dealer finance in January 2009 compared with January 2008.

Hire Purchase on new and used cars fell 44% and 30% respectively in January compared with January 2008.

However, the number of private new cars bought using dealer finance in the last 12 months remains strong and now accounts for 53.1% of the market or 466,000 cars.

Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “Good deals are still available in the dealerships and consumers are looking at different ways to finance cars. Leasing and Personal Contract Purchase have proved more popular over the past year, partly because consumers have less disposable income and are uncertain about what the future holds.

“In order that lenders can continue to offer finance into 2009, we are discussing with the Government how its new asset purchase and guarantee schemes might be used to help the motor finance market.”