Spending review stymieing business vehicle finance
According to the FLA, business usage of financing for cars dropped by 17% for new cars, and by 4% for used cars in September. Overall so far this year, total volume of business car bought on finance has remained flat.
However, there was an increase in new and used car finance compared to September last year. The number of new cars sold on finance to consumers was up by 5% and the number of used cars by 6%, despite a fall of almost 19% in the total number of private new car sales in September.
Commenting on September’s figures, Paul Harrison, head of motor finance, said: ‘We still have some concern about the business cars sector, where new loans have fallen. Businesses are still cautious about investment and this is likely to continue while the economic effects of last month’s Comprehensive Spending Review remain unclear.
‘The rise in the use of motor finance is great news for dealers, coming as it does in such an uncertain and volatile economic climate. Over the year we have seen ups and downs in the number of people using dealer finance for both new and used cars, so it is encouraging to see a strong performance in the important month of September.’