Number of cars bought on finance continues to rise

The number of new cars being bought using dealership finance plans in the UK grew by six per cent year-on-year in May, new figures have shown.

According to data from the Finance & Leasing Association (FLA), the average amount of money given to customers to enable them to buy their new car stood at £16,500 in May 2015, which is four per cent higher than the same month the year before. Meanwhile, the FLA also revealed that the percentage of private new car sales that had been financed by its members through dealerships reached 77.6 per cent in the 12 months to May, which is a record high.

Affordable finance plans are evidently proving popular with customers, helping them to pay for their cars in instalments rather than costly one-off sums. Car dealerships and garages, like most businesses, will also want to avoid large one-off payments, which is why business insurance - specifically motor trade insurance - is so important. This will protect the business and its assets so if something goes wrong, such as a fire or theft, the insurance company will cover the costs, helping the trader avoid the big one-off fees.

The FLA revealed that the number of used cars being bought on finance was also continuing to rise; the amount of new business in the consumer used car finance market was up eight per cent by value and three per cent by volume in May 2015 compared with May 2014.