VAT scare fuelled finance drive to dealers
publication date: Feb 16, 2010
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author/source: Robin Roberts
| The drive to beat January’s VAT increase saw
car-dealer finance rise by 91pc compared to 12 months ago, says the
Finance and Leasing Association. In the final quarter of 2009, volumes increased by 56pc compared with Q4 2008. The record rise is mainly due to the consumer rush to beat the VAT increase. Car buyers were able to save £375 on the sales tax on a car costing £15,000. A weak December 2008 performance also contributed to the record growth rate. | ||
| New cars bought by consumers using Personal Contract Purchase (PCP)
were up in December by 90pc and by 8pc in 2009 as a whole, reflecting
the attraction of this product’s flexible payment options. Commenting on December’s motor finance figures, Geraldine Kilkelly, Head of Research and Chief Economist, said, “The growth in the car finance market in the final quarter of the year is encouraging. But the figures for the full year still show a fall in the number of new cars bought by consumers on finance – a situation repeated in the used car finance and business car finance markets. “Using car finance from the dealer remains a popular option, with 45.8pc of private new car sales financed this way. But the UK has only just limped out of recession and with the end of Government incentive schemes, the next few months may see quieter times in the car showrooms.” | With 1 in 4 cars checked with HPI subject to an
outstanding finance agreement, falling victim to finance fraud is sadly
an ever increasing possibility. HPI is urging used car buyers to be on their guard and avoid the latest finance scam triggered by the recession by checking the facts before they buy – or face the car of their dreams being repossessed by the finance house that rightly owns it. Nicola Johnson, Consumer Services Manager for HPI. “Buyers need to be aware that some vehicle history checks do not include finance information which leaves them vulnerable to any type of finance fraud. The provision of a seller receipt or purchaser receipt will not offer legal protection for a buyer if the car later turns out to be on outstanding finance. The hard truth is that finance companies can and will take back their asset if a loan secured against it is defaulted upon". According to the FLA almost 40pc of all motor fraud cases in Quarter 3 of 2009 were people selling cars that had outstanding finance against them and therefore they didn’t own. | |