Car dealers across the UK experienced a boost in consumer demand for new car finance in April, according to the Finance and Leasing Association.

Latest figures from the group show that underlying demand for car finance rose by 20 per cent during April – the eight successive month in which demand has increased. There was also an increase in used car finance sales.

The FLA said although uptake of dealer finance is yet to hit levels seen before the recession, the April figure shows there is still cause for optimism in the market.

It said: The rise in the number of new and used cars bought in April shows that there is still demand in the motor market and that consumers are confident about committing to car purchases and loan repayments in the coming months and years.

Paul Harrison, head of motor finance at the FLA, added: These figures are good news for dealers and finance providers, especially since the drop in demand that we saw in other countries when scrappage schemes ended, has not been repeated in the UK.

Both new and used car finance sales were positive in April. But we expect to see sales of new cars declining in the second half of the year as consumers return to the used car market as the stock of used car increases.