Car Finance Gains Popularity in Q4 2009

Feb 26 2010 The motor industry, which was one of the hardest hit industries from the ‘credit crunch’, has received positive news with figures released by Finance & Leasing showing a huge rate of growth between December 2008 and 2009 of 91%. This news was warmly welcomed by car dealers offering car finance who are now hoping for continued improvements in Q1 of 2010.

The rise was steepest in the final quarter of 2009, with many consumers trying to purchase their car before the scheduled VAT increase. A typical consumer purchasing a £15,000 car before the VAT increase made a substantial saving of £375.

Car finance has become difficult for some consumers to obtain with the lenders only offering finance option to the prime candidates. As consumers haven’t been able to obtain finance, car sales have dropped. There is now a feeling that lenders are starting to approve more financing options which has contributed to the rise in car sales.

Although these figures are encouraging there was still a fall in the amount of new cars that were purchased by consumers using car finance. Car dealers were the most popular method used to gain car finance, however specialist car finance providers, such as Creditplus.co.uk, have also remained a popular option.

There are worries that in the coming month’s car sales may struggle again due to the rise in VAT and government incentives, such as the ‘scrappage scheme’, coming to an end. Car dealers will be hoping that they can continue the strong finish in 2009 and carry it forward in 2010. To encourage the continuing growth of sales many dealers have started their own ‘scrappage schemes’ and also had freezes on the VAT price rise.

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