Car loans 'up by a fifth' in March

By Joel Stanier

If you're thinking about taking out a loan to buy a new car in the near future, you might be pleased to learn that the number of cars bought on finance increased by more than a fifth (22%) in March.

Despite difficult economic conditions making loans harder to come by than they used to be, car finance has stayed relatively strong. According to figures from the Finance & Leasing Association (FLA), consumers bought 182,378 cars on finance during March alone.

And the total value of car loans had actually increased by a third (33%), suggesting people are becoming more comfortable with borrowing more.

Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented: "The strong new and used car finance growth figures in the important month of March are good news for the UK motor industry. This year the number of new cars sold is 22% higher than last year, which shows that forecourt finance continues to be extremely popular.

"Motor finance allows customers to negotiate a flexible finance package to suit their budget. Personal contract purchase (PCP) remains the most popular with new car buyers. Encouragingly, used car finance has also performed well, with the number of financed cars sold up by 9% in the first quarter of this year."

A loans expert at Think Money said: "Car buyers can often find very competitive finance deals on the forecourt, although it's also worth checking your other options. With interest rates currently low, some people may be able to find a cheaper deal with their bank. And of course, the more you can save in advance, the less interest you'll pay in the long run."

Image © iStockPhotos / ARENA Creative

Tags: car, loans, car finance, new cars, FLA, Personal contract purchase, PCP, interest rates

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