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Increase in car finance purchases
Wednesday March 30th 2011
People are buying more new and used cars on finance compared with the market's expected level of such purchases, according to a new report.
Figures from the Finance and Leasing Association show that 20% more used cars and 6% more new cars were sold on finance in January than the year before.
During the month, many dealers offered low and 0% finance deals on cars, helping people to buy new and used cars and reduce the impact of the VAT rise.
Whether you buy a car new or used, its value can drop quickly. This makes it worthwhile taking out a car value protector policy, which will cover the difference between your car insurer's valuation at the time the car is stolen or written off, and its value when the car value protector was bought.
Dealer finance is still the most popular way to buy a new car, with 53% of buyers choosing this option in the last 12 months.
Commenting on January's motor finance figures, Paul Harrison, head of motor finance, said: "New and used car finance sales in January exceeded market expectations. In addition to the flexibility offered by dealer finance, there were good, low-interest rate deals available which contributed to the unexpected growth. January's figures should, however, be viewed with caution, as the economic outlook in 2011 remains uncertain.
"More and more customers are turning to personal contract purchase agreements because of the flexibility this provides. Customers do not have to commit to buying the vehicle outright if they do not want to and can hand the keys back and walk away once all payments have been made. PCP deals accounted for 60% of the credit advanced for new cars in 2010."
Copyright © Press Association 2011
If your car gets written off, helpucover will pay the difference between your car insurers valuation at the time of the accident or theft, and the car's value when you purchased Gap Car Insurance.