Personal Contract Purchase (PCP) agreements grew 54% from last year’s levels in the new car finance market in August, according to Finance & Leasing Association (FLA) figures. Its seems customers are also using PCP deals to buy used cars as the second hand market grew 46% in August as well.
New car finance increased by 20% as a whole in August and used car finance by 17% but hire purchase (HP) grew just 1% in the new car market and by 21% in the used car market.
Paul Harrison, head of motor finance at the FLA said: “The increase in personal contact purchase (PCP) shows customers are choosing to finance purchases in a way which is both affordable and flexible.
“Options like PCP are proving popular as customers benefit from fixed monthly repayments and can decide at the end of the deal if they wish to own or return the car. These finance deals are secured against the car which means greater protection for consumers and lenders.”