The number of used cars bought through dealer finance schemes increased in August, it has been revealed.
Sales of used cars financed by dealers increased by 21% year-on-year, with customers perhaps attracted by lower prices as well as the chance to lower theircar insurance premiums.
The Finance and Leasing Association has said that new car sales fell by 12% to private buyers and 26% to businesses in the same month.
Paul Harrison, Head of Motor Finance, said: "Following the withdrawal of a range of incentives to 'buy new', consumers have returned to the used car market where lower prices are attractive and mean that buyers need to borrow less."
He added that despite strong growth this month, it must be remembered that August 2009 was a "weak" month during which the country was still in recession.
He said: "While we expect sales of new cars, particularly prestige cars, to recover slightly towards the end of the year as consumers seek to beat the VAT increase, there is also the, as yet unknown, effect on consumer confidence of this week's Comprehensive Spending Review."
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