Car finance will be a crucial factor in determining the strength of the car industry during the course of 2010. According to Michael Gartside of PWC, the new car market might not take the hammering feared by much of the industry. However, some factors are sure to damage sales.

The first is the return of VAT from 15 to 17.5%, and the second is the end of the car scrappage scheme, a government incentive that many believe has kept the car industry alive through the economic downturn.

The SMMT recently pointed out that vehicle finance would have a huge role to play in keeping the car industry afloat. The Society of Motor Manufacturers and Traders anticipated a fall in new car purchases, but also pointed out that car loans and finance were very available.