The share of new cars sold in the UK being purchased on credit has risen to a record high of 74.5% according to a report in the Financial Times.
The FT report said that credit accounted for 74.5% per cent of new car purchases in the 12 months to August, which compares with around 50% pre-recession.
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The newspaper said that the increase in car financing reflects a rapid recovery in consumer credit in Britain, which is “now growing at rates last seen in 2008”. The report added that Bank of England data show that consumer lending has been growing for the last two years.
The UK car market is continuing to grow and this year could top 2.2m units, led by strong growth from private retail buyers.
It’s the private retail buyer – increasingly on a fixed-term personal contract purchase (PCP) plan – who is being drawn into replacing their car and pushing the UK car market up.
With interest rates still at historical lows, replacing a near three-year-old car on a plan reaching maturity is an attractive proposition to many. The car companies are presenting very good deals on the latest models, which will also come with the promise of more efficient engines and lower running costs.
UK: New car sales up 12.1% in September
