The new car finance market in the UK is continuing to grow at a significant speed, new findings have shown.
According to the latest figures from the Finance & Leasing Association (FLA) – the motor finance industry's trade body – July 2012 saw this sector increase 48 per cent by value and 42 per cent by volume when compared with the same month one year earlier.
This represents the strongest monthly growth seen so far this year and suggests those looking for the latest Ford deals, Volkswagen deals and Mazda deals are increasingly turning to this type of purchase in order to get hold of the cars they desire.
In addition, it was demonstrated that of all motors acquired by consumers in the last 12 months, 68.6 per cent of the transactions were carried out using finance sold in dealerships.
This equated as the highest level recorded since the FLA started keeping track of such figures.
Car finance product popularity
A number of different car finance products have proven popular among motorists of late. According to the FLA figures, Personal Contact Purchase was the most favoured option in July, with this making up 60 per cent of all the granted finance.
This was markedly higher than the 28 per cent accounted for by higher purchase, as well as the seven per cent made through leasing.
A further five per cent of granted finance involved personal loans that were provided by dealers for new cars.
Finance is an important consumer credit source
Paul Harrison, head of motor finance at the FLA, noted finance appears to be getting more and more important with regard to buyer numbers.
Mr Harrison stated: "Almost 70 per cent of car buyers – 600,000 people – used finance from the dealer to buy their new car in the last 12 months, showing that it is a vital source of credit for consumers.
"It allows people access to cars they need to get to work and support their families and lifestyle."
Finance can support the economy
Mr Harrison pointed out a total in excess of £15 million has been lent by car dealers to consumers in the last year alone – a substantial sum that should go some way to supporting the economy.
He recommended the government places extra focus on the industry and does all it can to make sure the specific needs of the sector are catered for.
Such considerations should be taken into account as the Conservative-Liberal Democrat coalition pushes ahead with its review of the future regulation of consumer credit, the industry figurehead added.
Businesses are also using finance
According to the FLA's figures, it is not just consumers who are increasingly using finance to buy vehicles, as businesses are too.
It was shown that the number of new cars bought this way by companies in the three months to July 2012 was six per cent higher than for the same period one year earlier.
For the 12 months to July 2012, moreover, the number was nine per cent higher than for the same spell in the previous year.
And it appears firms are also using finance to get hold of greater numbers of used cars, with 42 per cent more second-hand vehicles bought by organisations in July this year compared to the same month in 2011.
This figure rose to 88 per cent, however, when the three months to July 2012 were judged against the three months to July the previous year.