2011: the Year From a Car Finance Perspective

Jan 4 2012

As 2012 begins, a quick retrospective of 2011 seems in order.

Despite the UK’s reputation for cheap car loans compared to much of Europe, car sales nosedived in March, intensifying a downward trend that had been present for the previous 12 months.  Shortly afterwards, the automotive sales business was hit with another unwelcome development: the decline continued into the following month and figures revealed that auto sales were down by 1.7% for the year.

However, as spring tiptoed toward summer, rays of economic sunshine began to shine on the car finance scene: car credit, the Finance and Leasing Association showed, was rising again, as more people began to replace their old jalopies with newer ones.  Car finance dealers had been exceptionally innovative, devising deals designed to help people buy the car of their wishes as affordably as possible, a strategy that appears to have worked.

Trends in car purchase began to shift during the year, however, with more people opting for vehicles with smaller engines or for green cars.  However, amongst the most cruelly squeezed in 2011 were young drivers: one young man hit the headlines after being given a quote for car insurance totalling £72,000.  The value of his vehicle?  The princely sum of £600.  Excesses like this may contribute to the unpleasant fact that, in the UK, upwards of 1.4 million people take the risk of driving without auto insurance of any kind.

Perhaps the elephant in the room is the sovereign debt crisis in the Eurozone.  If it can be managed properly, much in the UK economy may begin to improve in 2012 – including, of course, car sales.

Author - Louise Hutchinson

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