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New car finance sales fell in August although sales of used car finance rose, according to the latest data from the Finance and Leasing Association (FLA).
Year-on-year sales of new car dealer finance to retail buyers dropped by 12 per cent, while sales to businesses customers slipped 26 per cent.
Meanwhile used finance rose by 21 per cent during the month.
New car sales in August, traditionally one of the weaker months of the year, fell 17.5 per cent.
“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,” said Paul Harrison, FLA’s head of motor finance.
“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.”