Car finance market down 27 per cent

Purchases of new cars on finance were down 27 per cent in March 2009 compared with the same month in 2008, the latest figures from the Finance and Leasing Association (FLA) show.March’s motor finance figures from the FLA show a disappointing market for car finance with consumer leasing of new cars falling 22 per cent in March 2009. While Personal Contract Purchase (PCP) fell by 2 per cent and HP by 35 per cent in the same time period.However the market for used cars was more buoyant, with many car leasing companies extending into used car leasing to meet the demand for affordable motoring. Consumers purchased 3 per cent more used cars with dealer finance in March.While the proportion of new cars bought by consumers on finance now stands at 53.9 per cent of all consumer new car registrations (436,023 vehicles).March is an important month for dealers and brokers with sales of new cars in this month often account ing for 20 per cent of a dealer’s annual sales. The figures show that new car finance is yet another part of the motor industry being impacted by the recession.Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The used car market is faring better than the new car market. This is a great time for consumers to buy a used car, as although volumes are up on this time last year, the value of finance provided is down – used cars are cheaper than a year ago. But March’s figures reflect the effect of the recession on the motor finance market.  This highlights the need for Government action to ensure the supply of finance meets demand."

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