Car dealer finance up
October 15th, 2009 by Richard Aucock
DEALER finance sales grew last month for the first time since July 2008, says the Finance & Leasing Association.
The rise represents a 4 percent increase on the number of cars sold through dealer finance in September 2008.
A relieved FLA chief economist, Geraldine Kilkelly, said ‘this is the first increase in dealer finance provided to consumers for new cars in over a year.’
It is not thanks to scrappage, either. There, ‘motorists tend to opt for buying small cars, and pay the balance from any part exchange… with their savings, rather than by using car finance.’
Wider market customers, including those buying high-margin models, are the ones driving dealer finance growth. This is being helped, added Kilkelly, by motor finance companies currently offering competitive deals.
However, it’s not all rosy. FLA members report that the high cost and restricted availability of wholesale funds is still a threat.
Positive news has come from the Government on that, says the FLA. Confirmation that it remains in discussions with the EC about a guarantee scheme to ease funding pressures has been welcomed. The aim now is to carry this through, said Kilkelly.
‘For the longer term health of the market, we still need to see progress from the Government in dealing with the wholesale funding issue.’
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