With industry figures showing that motor dealer finance
dropped significantly in the first months of 2009, the Finance and
Leasing Association (FLA) has urged the UK government to take
concrete action to revive the market.
According to the FLA, consumers purchased 21 percent fewer new
and used cars with dealer finance in February 2009 compared with
February 2008.
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Consumer leasing of new cars also fell by 36 percent by value
compared to the previous year, although Personal Contact Purchases
(PCPs) were up by 3 percent.
Despite the overall decline, the FLA said that dealer finance
remains the most popular way to fund a new car, with over 50
percent of car buyers purchasing a vehicle on finance in the last
12 months.
Geraldine Kilkelly, chief economist at the FLA, highlighted that
the figures gave “further evidence” of the need for government
support to boost liquidity in the motor finance market.
She said: “Our discussions with Government on support for all
motor finance providers are reaching a critical point.
“Urgent action is needed to enable finance providers to meet
consumer demand that is currently going unmet due to wholesale
funding problems.”
