FLA Names Forecourt Finance Most Popular

The Finance & Leasing Association (FLA) just released new statistics revealing that most UK car buyers are using forecourt finance to purchase new vehicles. During the last 12 months, over 54 percent of consumers used car finance through a dealer.

This represents a 1.6 percent increase from the relevant figure released in February 2011.

March financing sales numbers are better than many expected, despite volumes experiencing a five percent decrease from March 2010. The used car market experienced a decline in car finance sales during March but first quarter 2011 figures were still three percent higher than first quarter 2011, in terms of both volume and values.

FLA motor finance head Paul Harrison commented that March was a month of mixed results for dealers.

Mr. Harrison noted that consumer budgets continue to be restricted, which led experts to be less optimistic with their predictions for March. Car finance providers were pleasantly surprised by the increase in the value of loans. The proportion of vehicles sold was a welcome occurrence for car dealers still struggling to dig out from the global financial crisis.

Business consumer confidence is another story. The volume of new car finance dropped eight percent during March, resulting in a five percent decrease for the first quarter of 2011, compared to first quarter 2010. Rather than investing in new cars, many companies are extending their agreement terms.

Business demand for financing is not linked as closely to number plate changes as are private purchases.

Retaining customers is key during difficult economic times, reported Mr. Harrison. Flexible financing arrangements like personal contract purchase pcp are making vehicles more affordable, he said. Initiatives like Specialist Automotive Finance from FLA are providing showrooms with improved financial details.

Dealers hope that their financing continues to be the method selected by most UK car buyers.