A recent report has shown that the need for used cars is consistently high, despite a potential rise in inflation and apprehension around residual values.
This is encouraging news for the UK car industry in the latter part of 2016. The period between January to June this year saw used car sales increase by 7.9%, reflecting a figure close to 4.2 million used vehicles which is an industry high since records began. This news is also reassuring for car finance providers such as Creditplus who, as the UK’s principal online car finance provider, have witnessed their application rate increase in the first nine months of the year by a notable 29%.
The continuing positive momentum has been partly attributed to used car Personal Contract Purchase (PCP) finance, which has made substantial strides in making car finance loans affordable for consumers across the board. PCP is one of the most popular choices amongst Creditplus’s customer base, with more than 79% of consumers choosing it as their preferred finance option.
One reason that Creditplus believe may be a factor is that consumer’s currently have slightly more expendable income to play with, following the continued low Bank of England base rate. This, coupled with a desire to place funds into a newer car rather than into a savings account, is assisting Creditplus in maintaining their success in a growing and competitive car finance market.
The resilience of car finance providers, dealers and consumers in the current financial climate - and continued uncertainty around June’s EU referendum decision - is proving to be strong. While the final quarter of 2016 will be impacted by seasonal demand and spending, 2016 to date has been a hugely successful year for car finance providers and dealers alike.
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