More than half of new vehicles purchased last year were bought using car dealer finance, making it the most popular finance option in 2010, data from the
Figures from the motor finance industry trade group show that 52.1% of new cars were purchased using dealer finance in 2010, an increase from the 45.8% seen during the previous year.
Last year, half a million people purchased a new vehicle through dealer finance packages collectively worth £6.4 billion.
In the used-car market, motor lenders provided £5.9 billion in funding to 635,000 people to buy second-hand vehicles.
Rising fuel prices, VAT increases, and highcar insurance premiums have made it difficult for motorists to buy new and used vehicles without choosing a suitable financing option.
Paul Harrison, head of motor finance, said: "Overall, the number of cars financed last year was up by 4% across all markets as buyers took advantage of the competitive deals on offer. However, while dealers had a good year in 2010, they are cautious about the future. We had previously forecast that the VAT rise in January might lead to a rush of sales in December, as consumers tried to beat the rise, as it did ahead of the VAT increase in January 2009.
"However, this did not happen. Consumer confidence is at its lowest for around two years, and this is reflected in December's figures, which showed a fall in the total number of new cars bought using dealer finance, while used car sales were flat."
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