Why Car Finance is Growing Fast in the UK
In this article, we explain why car finance has grown so rapidly in the UK.
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- 5 months ago
Some people wonder if buying a car with car finance is a wise idea instead of breaking the piggy bank and purchasing a car in one payment. If you’ve wondered the same, we will give you some reasons why car finance remains the top choice for car purchase today in the UK. Over the past few years, car finance has become increasingly popular for both first-time buyers and experienced drivers alike, because financing a car is much faster, doesn’t break your bank and means you can get a good quality car.
The first few months of 2020 were hard on everyone, but the horizon seems a little brighter now according to the FLA (Finance and Leasing Association), who said that the car finance market is expected to grow by 19% in 2021. Also, on June 7th, the FLA showed that new business volumes increased 13% more than the same period in 2020. This is definitely good news for the market and for car buyers, so let's take a look at some of the reasons why these numbers are increasing fast:
FlexibilityJust as vehicles are evolving, so is car finance and at a very fast pace. Splitting the cost of a car over low and affordable payments is more appealing and represents less stress. The UK car finance industry has implemented new ways for car buyers to find the best deals for every financial circumstance, even for people who have poor credit who may usually be declined for finance. This flexibility also suits people who may have good credit but who prefer to have more liquid cash flow or find it difficult to put down an initial lump sum; instead of paying an up-front deposit, they can select a ‘no deposit’ option. With this type of car finance, the buyer doesn’t have to save up money for years to get accepted for a car loan. Now self-employed people and people with complex circumstances can have an opportunity to buy the car of their dreams or the car that best suits their current lifestyle. A no deposit car finance deal therefore means that the process of applying for car finance is further expedited.
New trendsAs a consequence of the stay-at-home restrictions and the new trend of working from home, less cars are used for commuting but, according to the UK Car Finance Report, 55% of UK drivers say their car has become more important since now they are using them even more for shorter trips. Another important trend is electric vehicles (EVs). By 2040, the government’s proposed ‘Road To Zero’ emissions plan will need sold cars to have an electric driving range of at least 50 miles. EVs will be leading the segment, especially because cars and vans powered wholly by petrol will not be sold by 2030. It therefore goes without saying that some people are already buying and financing these types of cars.
With no deposit options, more flexibility and better cars, it's no surprise that car finance is quickly growing among the UK’s population to secure their first car or upgrade to a newer one. Our Car Finance Calculator can help you work out exactly how much you can afford to pay each month without compromising your peace of mind or your bank account. This article was brought to you by Quick Car Finance, a leading UK car finance company with a Trustpilot review score of 4.9/5.
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