The worth of finance deals used to purchase new vehicles has skyrocketed to a new monthly record, according to most recent figures.
Motorists spent ₤ 3.6 billion ($4.64 billion) on automobile finance deals in March, an increase of 13% on the exact same month in last year, the Finance and Leasing Association (FLA) stated.
The huge majority of the purchases were by means of so-called Personal Contract Purchases (PCPs).
The Bank of England and the Financial Conduct Authority (FCA) have raised issues about such deals.
The Bank’s concern is in relation to levels of customer borrowing.
However Adrian Dally, head of motor finance at the FLA, stated lenders were behaving properly.
“We do not share their concerns,” he informed the BBC. “Lending is responsible. This is a sustainable model going forwards.”
Both new and pre-owned cars can be purchased on PCPs, under which buyers effectively rent a vehicle as much as four years.
They can then provide a final lump sum or return a cars and truck at no additional cost at the end of an agreement – as long as it is within an agreed mileage and in fair condition.
