There was a 10 per cent growth in the number of new cars bought with consumer finance in December 2014, new figures have revealed.
According to the Finance & Leasing Association (FLA), new car finance volumes reached 897,593 last year, which was a 13 per cent increase on 2013's total. In the 12 months to December 2014, 76.1 per cent of all new cars in the UK were purchased with consumer finance schemes, the data also showed.
Car buyers are using consumer finance options to avoid large, one-off payments, in much the same way as car sellers can protect themselves against the need for sizeable capital outlay by obtaining a high quality road risks insurance or motor trade insurance policy. This will offer financial cover should the business or its assets experience damage or theft and therefore require costly repayments or replacements.
Geraldine Kilkelly, FLA’s head of research and chief economist, commented on the findings: "There has been strong growth in consumer motor finance provided through dealerships by FLA members over the last couple of years.
"Our most recent industry confidence survey suggests that growth is likely to continue in 2015, but at a slower rate than in 2014."
Away from the motor trade industry, the FLA revealed that last year its members provided £99.5 billion of new finance to UK businesses, the public sector and households. The majority (£74.1 billion) of this came in the form of consumer credit, while £32.4 billion of the total supported the purchase of new and used cars by businesses and households.