17 February 2012

Car industry sees record high on dealer finance in 2011

Of all the cars that were purchased last year, 62.9% were bought by consumers using dealer finance.

As the latest figures from the Finance & Leasing Association have revealed, 62.9% of all new cars were bought by consumers using dealer finance; this represents a rise of almost ten percentage points compared to 2010.

On top of this, Brits buying new cars using dealer finance last year also increased by 1 point – registering almost 517,500 vehicles. Dealer finance also helped consumers to purchase almost 729,000 used cars – 4% more than in 2010. Overall, almost 1.25 million cars were purchased using finance provided through dealerships.

"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,” said Paul Harrison, Head of Motor Finance at the Finance & Leasing Association.

Harrison added that consumers are looking for finance that suits their budget these days, and the importance of affordability is shown by the number of consumers turning to leasing or personal contract purchase.

Budgeting the car costs

As well as relying on car dealer finance to adjust their desired purchases to their real budget, there are other methods British drivers can follow in order to reduce the costs related to driving a car.

Making the decision to compare car insurance quotes is the first step to take in order to save as much money as possible where motor insurance is concerned.

Some Brits who don't use their car much are realising that the cost they pay for insurance, MOT and taxes is not worthwhile and are turning to other strategies instead.

A number of squeezed drivers are considering the idea of using public transport in their every day routine and then hiring a car when they need to do longer trips. Car hire insurance can also be compared and purchased online.