Finance & Leasing Association7 February 2013
New figures released today by the Finance & Leasing Association (FLA) show a 36% increase in the value of consumer new car finance provided through dealerships in 2012. The number of new cars financed in this way increased by nearly 140,000, or 27% compared with the previous year.
Paul Harrison, Head of Motor Finance at the FLA, said: “These figures show that customers want good value deals and are finding them. The number of cars financed by FLA members is at its highest level since before the start of the recent financial crisis.
“The factors underpinning consumer confidence in motor finance seem likely to continue. And a quarter of all showrooms are now approved under the FLA’s Specialist Automotive Finance initiative (SAF), which helps ensure high levels of understanding of the finance options available to customers.”
During 2012, motor finance providers saw a 14% rise in the total number of new and used cars bought by consumers and businesses using dealer finance. A total of 1.91 million cars were financed, compared with 1.67 million in 2011. This strong growth in dealer-based motor finance meant there was a significant increase in the percentage of private new car sales financed by FLA members, which rose from 63.5% in 2011 to 71.2% in 2012. The consumer used car finance market also had a good year.
Overall in 2012, this market reported both value and volume growth of 8% compared with 2011.
| Table 1: Cars bought on finance by consumers through dealerships | ||||||
| Dec-12 | % change on prev. year | 3 months to Dec 2012 | % change on prev. year | 12 months to Dec 2012 | % change on prev. year | |
| New cars | ||||||
| Value of advances (£m) | 633 | +29 | 2,228 | +39 | 9,408 | +36 |
| Number of cars | 41,056 | +23 | 153,286 | +34 | 662,052 | +27 |
| Used cars | ||||||
| Value of advances (£m) | 469 | +16 | 1,733 | +15 | 7,264 | +8 |
| Number of cars | 47,426 | +10 | 180,718 | +10 | 787,821 | +8 |
| Table 2: Cars bought on finance by businesses | ||||||
| Dec-12 | % change on prev. year | 3 months to Dec 2012 | % change on prev. year | 12 months to Dec 2012 | % change on prev. year | |
| New cars | ||||||
| Number of cars | 28,107 | -6 | 94,924 | +2 | 396,343 | +5 |
| Used cars | ||||||
| Number of cars | 3,215 | -50 | 17,019 | +40 | 62,317 | +40 |
ENDS For further media information, please visit www.fla.org.uk or call 020 7420 9664
Note to editors:
- In 2012 FLA members provided £76.3 billion of new finance to UK businesses and households. £54.9 billion of this was in the form of consumer credit, 30% of all unsecured lending in the UK. And £23.3 billion of it supported the purchase of new and used cars, including more than 70% of private new car registrations.
- Specialist Automotive Finance (SAF) was launched by the FLA in June 2007. SAF aims to raise consumer awareness of finance sold in dealerships by raising standards and improving skills amongst dealership staff.
- Central to SAF is the FLA’s online competence test, launched to dealers in October 2007. The competence test is a free-of-charge assessment covering the finance products sold in showrooms and the surrounding regulation. The test does not teach staff how to sell finance but aims to improve their overall finance knowledge. To remain SAF-certified, individual staff must renew the test every 12 months.
- As part of SAF, the FLA has also developed an impartial consumer guide to motor finance – www.FinancingYourCar.org.uk. The web site helps potential car buyers to review all of the options available in showrooms to help them purchase their next car, all from the comfort of their own home.
- www.SpecialistAutomotiveFinance.org.uk is the SAF portal for the industry to help companies learn more about the initiative.
- SAF is fully endorsed by the motor finance industry and is funded by FLA member finance companies.
