Car supermarket Motorpoint has reported a surge in sales last month when most dealers were seeing slower sales.

Like the SMMT, over one third of franchised car retailers are predicting a downturn in annual sales this year, according to the used car price guide publisher CAP, but Motorpoint reports that it has defied the current market trend, witnessing a surge in sales in January buoyed by strong demand from buyers employed in the public sector, and the availability of "competitive" finance arrangements.

Motorpoint and other supermarket customers can choose from a large range of virtually new and used makes and models, and in Motorpoint’s case, are offered a ‘Boomerang(TM)’ personal contract purchase scheme underwritten by Lloyds TSB’s Blackhorse arm, in which Motorpoint provides a £300 contribution towards the customer’s deposit.

WAF chairman Garel Rhys, said of Motorpoint’s sales, "Ironically, it has taken the credit crunch to bring car supermarkets into their own.

“They are in a strong position during this period of uncertainty, as they have access to a large range of vehicles at competitive prices with affordable finance deals available for customers."

By reducing the interest rate to 5.25 per cent, The Bank of England is giving the economy chance to recover,’ said Sue Robinson, director of the RMI’s National Franchised Dealers Association.

The Bank of England announced it would cut interest rates to 5.25 per cent. The rate was previously reduced in December 2007.

Robinson said, “Retailers, including car dealers have felt the crunch during the last few months, and although last year’s car sales figures were up, the outlook remains uncertain unless interest rates come down, and stay down.

“Consumers face rising costs including above-inflation rises in household costs, as well as the need to pay off debt. All of these costs have impacted on consumer spending, which has a knock-on effect on business.The interest rate reduction will help to increase consumer confidence, which should have a positive influence on the overall economy.”