According to recent car finance news reports, sales of new vehicles using dealer finance have grown for the first time since July last year. The figures, published by the Finance and Leasing Association, could hint at a recovery in the motor finance sector. The boost occurred alongside an increase in new car registrations.

The number of new cars sold with dealer car finance shot up by 4 per cent on last year’s figures. However, despite these positive signs, confirmation of an end to wholesale funding pressure is urgently required by members of the FLA, with considerable threats to business reported.

Geraldine Kilkelly, the Head of Research and Chief Economist at the FLA was reported in vehicle finance news as saying: This is the first increase in dealer finance provided to consumers for new cars in over a year. Motor finance companies are telling us that the impact of the car scrappage scheme on finance sales has been limited. Motorists tend to opt for buying small cars and pay the balance from any part exchange under the scrappage scheme with their savings, rather than by using car finance. But dealer finance remains a popular option for consumers. Motor finance companies are offering competitive deals, which are driving sales. For the longer term health of the market, we still need to see progress from the Government in dealing with the wholesale funding issue.