More use finance to buy new car

More people took out finance to pay for a car during July, according to new figures.

Year-on-year transactions in car finance increased by 6% to £927 million during the month, which is good forcar insurance firms.

However, firms in the rest of the consumer credit industry did not do as well, as the UK public focuses on paying off debt rather than getting into more.

Members of the Finance & Leasing Association lent an overall £4.06 billion, down 8% on July 2009.

Firms in every area of consumer credit, except car finance, saw declines in transactions. The biggest fall was through store cards and store instalment credit, with both sectors down 24%.

The number of unsecured loans sold was down 17% to £195 million and demand for second mortgages fell by 11% to £25 million during July.

And the amount of cash borrowed via credit cards was down 9% at £2.51 billion, although this is still the biggest consumer credit sector.

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