Used car finance sales up in August

Sales of used cars using dealer finance rose by 21% in August when compared to the same month in 2009, according to the latest motor finance statistics from the Finance & Leasing Association.

However, sales of new cars to consumers and businesses using motor finance were down by 12% and 26% respectively. August is always a quiet month for the motor industry as motorists wait for the release of the new number plate in September. Next month’s FLA figures will show us whether the new car market recovered in September.

Commenting on August’s motor finance figures, Paul Harrison, Head of Motor Finance, said: “Following the withdrawal of a range of incentives to ‘buy new’, consumers have returned to the used car market where lower prices are attractive and mean that buyers need to borrow less. However, despite strong growth this month it must be remembered that August 2009 was a weak month when the country was still in recession.

“While we expect sales of new cars, particularly prestige cars, to recover slightly towards the end of the year as consumers seek to beat the VAT increase, there is also the, as yet unknown, effect on consumer confidence of this week’s Comprehensive Spending Review.”