Significant growth in new car finance deals
As the UK heads for a new car market in excess of 2.5m this year, with the economy continuing its long bounce back from recession, more motorists are benefitting from new car finance deals than ever before.
Figures released by the Finance & Leasing Association (FLA) show the number of new cars bought on finance increased by 13% in July, compared with the same month last year.
At the same time, the percentage of private new car sales financed by FLA members in the twelve months to July reached 78.7%, up from 78.1% in the twelve months to June.
The used car market also showed continued growth, with the numbers of used cars bought on finance up by 9% to 102,322 vehicles compared with July 2014.
Buoyant finance figures
In July this year, there were a total of 70,444 new cars acquired on finance, compared to 62,340 in the same month last year.
In the three months to the end of July, the figure was 228,629, a rise of 11%, and in the last 12 months there have been 939,696 new cars bought on finance – a 10% increase on the previous 12 months.
At the same time, the value of new car finance sold in the last 12 months, stood at a massive £15.15bn, a 14% increase over the previous year.
August looks set for further growth
The latest new car registrations in August showed the UK new car market was up again, marking the forty-second consecutive month of growth, fuelled to some extent by attractive new car finance deals.
In August, some 79,060 new cars were registered, up 9.6% on last August. So far this year new car registrations have risen 6.9% to 1,634,369 units.
Most pundits expect new car finance volumes to continue to grow over the coming months.
What’s driving sales to higher levels?
Undoubtedly, one of the biggest single factors behind the increase is the availability of cheap new car finance.
Four in five new car purchases are now made on credit, according to the Society of Motor Manufacturers and Traders, with many customers acquiring a new car through personal contract purchase (PCP) plans, which account for 70% of all new car finance deals.
Under this method, the buyer puts down a deposit, pays a monthly figure, often at 0% interest, for a set period, typically two or three years, and at the end of the term hands the car back to the dealer or buys it for a pre-agreed price.
What other options are available?
In the UK, unlike our cousins in the US, when it comes to cars, we’ve tended to prefer to own them outright.
However, personal leasing can offer a financially viable alternative to purchasing a new car, with no worry about depreciation costs as you simply pay for the use of the car, and can change it at regular intervals.
The vehicle is purchased by a finance company which estimates a value of the vehicle at end of the term and calculates your monthly payments accordingly.
The benefits are that there is simply no residual value risk plus known, fixed monthly payments. Make sure the car is returned in a reasonable condition and not at a greater mileage than stated at the start of the contract, and you can immediately switch to another brand new car – what could be easier!
At Maxxia, our personal leasing scheme is available at www.myleasedeals.com and provides the opportunity to browse or search through a huge range of personal lease car finance offers for some of the very latest new models in the market.
Benefits of our personal leasing service
- We manage the whole process so that you don’t have to shop around for competitive quotes
- Everything is contained in one online location so vehicle comparisons are very easy
- We will provide support with impartial advice about vehicles and funding options
- You won’t have to haggle with salespeople
- Highly competitive prices as the site bring together the best offers in the market at that time, getting you a great deal
- You’ll have access to a range of special offers
- You can order any make or model of car to suit your lifestyle
- Our systems will help locate in-stock vehicles wherever they are more quickly.
Easy to use
Once you’ve found the new car that meets your requirement, all you have to do is simply fill in the quote request form, letting us know which vehicle you are interested in and the timescale you would like to run it for.
You will be asked to pay an initial deposit, and then advised of the set monthly costs. The amount of initial upfront payment can be tailored to meet your exact requirements.
The rates are advertised in our special offers section and usually include an initial payment of three, six or nine monthly rentals in advance. Obviously, the higher the initial payment made, the lower your monthly rental will be.
You can pre-agree the length of the contract and the annual mileage when you take it out. Typical contracts are from 24-60 months and mileage bands usually range from 10,000-40,000 miles per annum. If you exceed the pre-agreed mileage then an excess mileage charge will apply. The figures will be provided on your quotation and final finance document.