Car dealer finance is now the most popular credit option

Car dealer finance was used to finance over half of the new vehicle purchases last year making it the most popular option in 2010. Over 52% of vehicles were financed using dealer financing that resulted in an increase of over 45% from the previous year.

The total amount of £6.4 billion was collectively used for dealer financing that included over a half a million people. The used car market included £5.9 billion in funding for over 600,000 people to buy pre owned vehicles.

A viable financing option has been needed by consumers, due to the high fuel prices, increases in VAT and the expensive insurance premiums, in order to make it easier to purchase a new or used vehicle.

The overall number of cars financed last year increased 4% across all markets. Even though 2010 was a good year cautious optimism is on tap for the future. They predicted an increase in sales in December to beat the January rise in VAT, but that did not transpire, and consumer confidence is at a two year low and was reflected in the fall of the total number of new cars bought with dealer financing.