The Bank of England has slashed interest rates by half a percentage point from 5% to 4.5% to ease financial pressures on the UK’s economy.
The decision to cut rates by 10% was not expected until tomorrow.
The Retail Motor Industry Federation's National Franchised Dealer Association (NFDA) will welcome the cut.
The NFDA's director Sue Robinson said that interest rates needed to be cut to allow the economy to recover.
Robinson said: "Lower interest rates will help bring stability to the economy, and reassure consumers, and help business. In the long run it is good for the economy."
The US Federal Reserve has also cut rates from 2% to 1.5%, while the European Central Bank trimmed its rate from 4.25% to 3.75%.