The government must support the car finance industry to prevent this sector from collapsing, experts say. Vehicle finance has been hard hit by the recession, with far few car buyers willing to go into debt to fund a new vehicle .

The Finance and Leasing Association published statistics showing that the number of vehicles purchased with dealer car finance only dropped slightly last month. However, motor finance for private and company car sales is way down on 2008 figures.

The FLA called for the government to implement a strategy to avoid long-term damage to the industry. The head of research and chief economist at the FLA, Geraldine Kilkelly, reportedly commented: The government needs to prepare for a sustainable recovery by ensuring that the car finance industry has the capacity to meet future demand.