Car finance increases

According to the Finance and Leasing Association (FLA) new and used car finance grew 3% and 6% respectively year on year. This shows that consumer confidence is returning to the car finance market. The figures show that in the year to May 2011, 56% of new car sales used motor finance – the highest share of the market since March 2009. The FLA also said that even though new and used car finance had varied month to month, motor finance is still an affordable and practical way to buy a new car. The sign ups up of leasing and personal contract purchase agreements for new cars were up by 14% in the last 12 months compared to the 12 months prior. However, Hire purchase agreements fell by 20% over the same period. Paul Harrison, FLA head of motor finance, said: “While economic uncertainty affects consumers when making big purchasing decisions, motor lenders have responded by offering value-for-money packages. More than half of all consumers choose to use finance from the dealer when they buy a new or used car. As competition in the credit markets increases we expect consumers to continue to benefit from offers matched to their individual needs and budgets.” In these hard times it is very difficult for consumers to access any form of credit. In order to encourage sales of new and used cars in Kent manufacturers have been coming with more flexible and innovative finance packages. Finance deals on new cars have been very attractive of late, but used car deals are also very enticing.