In August 2011, the percentage of motorists purchasing vehicles privately on finance was at its highest for four years.
In August 2011, the percentage of motorists purchasing vehicles privately on finance was at its highest for four years – according to The Finance & Leasing Association. Compared to the same period last year, the proportion of new cars purchased on forecourt finance increased by 17% - to over 57%. Used finance sales rose too, by 8%. Personal contract purchase plans were particularly popular as these are often available with low interest rates and small monthly payments. Total sales for this type of contract increased by 24%.Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented: “These figures show that forecourt finance continues to be extremely popular. Motor finance has an edge over other purchasing options in current economic conditions as customers are able to negotiate a finance package to suit their budget, whether it is a leasing, PCP, hire purchase or a loan agreement.” Personal contract purchase plans come in various shapes and sizes. Most require an initial deposit, which is then followed by monthly payments (including interest) over a specified period. These tend to range from two to four years. At the end of the contract motorists can either return the vehicle and walk away – or settle the final purchase payment to own it outright. This final sale figure is pre-agreed at the beginning of the term.