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Related Tags: Finance, Car Finance, Car Loan, New Cars, Used Cars, New Car Finance, Finance and Leasing Association , FLA, used Car Finance
Car finance sees 28 per cent growth in January as more drivers rely on borrowing to buy new cars
SQUEEZED drivers are resorting to car finance in desperate efforts to fund their new cars, according to new figures released today.In January, a total of 43,175 new cars were bought with finance through dealerships, with £613m in advances – a 28 per cent increase from one year earlier. Meanwhile, 70,905 used cars were purchased with the aid of car finance – a six per cent increase on last year.
Due to the increased demand, the Finance and Leasing Association is calling on the government to better regulate the consumer credit market.
Speaking on the increased demand and the government’s timetable for writing a new set of rules for car finance, Stephen Sklaroff, Director General of the Finance and Leasing Association, said: “It is gratifying to see that the Government has accepted the need for a tailored regulatory regime for consumer credit, proportionate to the many different kinds of lending including motor finance. But the speed with which they intend to write the new rules gives us cause for concern.”
The consumer credit market contributes £260bn to the UK economy annually, with millions of people relying on it to fund everything from their car to their sofa.
“Tens of thousands of high street stores, motor dealers, and the lenders which provide the credit need a realistic time-frame in which to prepare for the new regulatory regime,” he went on to explain.
“The Government’s target of April 2014 seems very tight, given the huge amount of work still to be done. A sensible transition period and a smooth process will be vital to maintain the current supply of credit to consumers and businesses.”
It is the fourth consecutive month which has seen growth in car finance. Businesses are similarly affected by the troubled times, with a 12 per cent increase in new cars and a 20 per cent rise in the number of used cars being acquired with car finance.
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