Dealers optimistic about demand for car leasing and contract hire

Motor dealers remain confident about the outlook for car leasing, hire purchase and contract hire deals. That’s the conclusion of a new survey by a leading trade body who found that the overwhelming majority of car dealers expect both the new and used car finance markets to grow over the next few months.

Cheap car leasing and low cost finance deals are encouraging more and more consumers to choose a new car. We look at the positive outlook for the car leasing sector and we highlight three of the most popular ways to finance your new car.

4 in 5 car dealers expect to see growth in the car leasing and finance market

The latest edition of the quarterly Finance & Leasing Association Retail Motor Finance Confidence Survey found that more than four in five car dealers (83 per cent) expect to see growth in the retail new car finance market. A third of dealers expected strong growth of between 10 per cent and 20 per cent.

The survey also revealed that 95 per cent of respondents expect growth in the retail used car finance market. Here, more than a fifth (21 per cent) expects growth of between 10 per cent and 20 per cent. 53 per cent expected growth in the light commercial vehicle finance market, with almost a quarter expecting growth of more than 10 per cent.

While the outlook for the contract hire and car lease market is positive, dealers have voiced concerns over any weakening in the economy and uncertainty regarding the transfer of consumer credit regulation to the new Financial Conduct Authority (FCA).

Paul Harrison, head of motor finance at the FLA, said: “The survey brings together the views of leading executives and it is quite clear that they want a new regulatory regime which does not harm competitiveness or the availability of credit for consumers.

“Even though the new regulatory regime comes into force on 1 April 2014, on the Government’s current timetable the final rules will only have been published the previous month. A sensible transition is needed to ensure the industry and the new regulator are ready for what will be the biggest upheaval in consumer credit regulation for a generation."

If you’re thinking of driving away a new car, you have a number of finance options to choose from. Next, we highlight three of the most popular types of car finance.

 

Your quick guide to 3 popular types of car finance

Car leasing gives you exclusive use of a car for a period of time. Rather than buying the car outright you put down a deposit and your monthly payments are based on the price of the car, your annual mileage and the expected value of the car at the end of the term. Once your lease finishes, you simply hand your car back to the lease company.

Hire purchase

Here, you agree a payment plan based on the cost of the car, your deposit and the number of payments you wish to make. As long as you make all your monthly payments, you will own the car at the end of the agreement.

A hire purchase scheme is likely to cost you more on a monthly basis than other types of finance but you will own the vehicle at the end of the term.

Personal contract hire

Personal contract hire allows you to drive a brand new car every few years. Your monthly payments are based on the car’s expected depreciation during the agreement period.

You are not committed to buy the car at the end of the finance term and you can simply hand the car back at the end of the contract hire agreement

Author Bio: Vincent Hill is Marketing Executive at First Vehicle Leasing . First Vehicle Leasing provides best  Fiat car leasing solutions to all over United Kingdom.

 

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Thursday, 15 November 2018
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