Increasing numbers of motorists are turning to long term car leases. According to the latest figures from the Finance & Leasing Association, the trade body for the motor finance industry, in Q2 2011 the value of leases for private cars rose by 55% compared to the same period last year.
More than £100 million was granted to customers leasing cars in Q2 2011, compared with just £66 million in Q2 2010. Although, the volume of leasing in the retail motor finance market is small, it is growing fast.
Dealer motor finance accounts for 57% of all new private car purchases and is also popular in the used car market. Last year 500,000 new cars and 635,000 used cars were bought using motor finance.
Commenting on Q2’s motor finance figures, Paul Harrison, the FLA’s Head of Motor Finance, said:
“Almost three out of five motorists buying a new car use dealer finance. While personal contract purchase (PCP) and hire purchase deals remain popular, increasing numbers of people are turning to leasing as an affordable finance option. Traditionally, leasing has been more popular with businesses, but many manufacturers and independent finance companies are offering new and improved leasing options to private customers.
“If insurance and servicing are included, it can make financial sense to lease, particularly for motorists who like to change their car every few years. Our independent website www.FinancingYourCar.org.uk has details on all the different finance options available for buying a car.”