The latest figures from the Finance & Leasing Association shows that in 2011 62.9% of all new cars were bought by consumers using dealer finance, almost ten percentage points up on 2010.
The number of new cars bought by consumers using dealer finance in 2011 was up by 1% to almost 517,500. Dealer finance also helped consumers to purchase almost 729,000 used cars, 4% more than in 2010. Overall last year, consumers purchased almost 1.25 million cars using finance provided through dealerships.
The total percentage of consumer car finance provided through PCP (Personal Contract Purchase) contracts grew in 2011 to 61.1%, compared with 58.7% in 2010. By contrast, hire purchase fell from 34% of the market in 2010 to 30.4% in 2011. Consumer car leasing accounted for 6.5% of the market, and continues to grow year-on-year.
Business car finance volumes fell by 2% in 2011 compared with 2010, although the final quarter of 2011 saw growth of 6% in the business new car finance market compared with Q4 2010.
Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented:
“Despite some of the gloomy headlines on retail confidence, in 2011 growth in the car finance market was driven by consumers. Value-for-money offers and flexible finance deals have attracted customers to showrooms and led to an almost ten percentage point increase (to 62.9%) in the popularity of forecourt finance for new cars.
“Consumers are looking for finance that suits their budget, and the importance of affordability is shown by the numbers of consumers turning to leasing or personal contract purchase.”