Majority Use Dealer Finance For New Cars

Figures just out show that for the first six months of 2010 the majority of new car purchases were brought using dealer finance. As banks put the squeeze on personal loans, it has been to the benefit of the forecourt financiers who have seen a staggering 264,377 customers using this method to fund their new car. This makes up 49.4% of all new cars sold during this period.

The Finance & Leasing Association’s figures indicate that the bulk of dealer finance was provided through the Personal Contract Purchasing scheme, making up 57% of the total. These particular packages have become ever increasingly popular with customers and dealers alike as they can be tailor made to suit the individual concerned and terms are more likely to meet their budget.

The initiatives popularity also springs from the fact that at the end of the period the customer can either elect to simply return the car, buy it out right or use the equity remaining as a deposit on another vehicle.

The news is also looking brighter on the business front as well, company purchases were up 15% on the same time last year and it seems businesses are once again looking at replacing older fleet vehicles with new cars.

It is not thought that there will be another drop in purchasing and that the figures are only likely to increase during November and December as customers try and buy new cars before the VAT increase to 20% takes place.