New car loans up by 48pc

By Helen Gradwell

When compared with July 2011, the new car finance market has grown by 48% (by value) and 42% (by volume) in July this year. It's the strongest growth of the year so far, according to new figures from the Finance & Leasing Association (which is the trade body for the motor finance industry).

68.6% of cars bought by customers in the last year were acquired using loans from dealerships. This is the highest level since FLA records started.

Personal Contract Purchase (PCP) was the most popular car finance product in July. It accounted for 60% of all loans granted. Hire Purchase accounted for 28% and leasing for a further 7%. The last 5% involved personal loans provided by dealers.

The head of motor finance at the FLA, Paul Harrison, said: "Almost 70% 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.

"More than £15bn has been lent by car dealers to consumers in the past 12 months, helping to support the economy. The Government should make sure that the specific needs of this important sector are catered for as it continues to review the future regulation of consumer credit."

Tags: loans, car loans, new cars, personal contract purchase

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