Britain’s drivers stuck 1million fresh cars worth £16.2bn on finance last year – as experts warn over the rise of debt-saddled used motors

By Rob Hull For Thisismoney.co.uk 13:16 BST eleven Feb 2016, updated 13:16 BST eleven Feb two thousand sixteen

• FLA said almost 1m privately registered fresh cars on finance in 2015
• This averages £16,500 per buyer, according to latest figures
• Eight in ten fresh cars are now acquired through finance deals
• My Car Check said unpaid finance alerts on used cars are up year-on-year

British drivers put almost a million fresh cars on finance in two thousand fifteen alone, accounting for an incredible £16.2bn worth of motors, according to fresh figures.

Statistics provided by the Finance & Leasing Association demonstrated a ten per cent growth in fresh car finance volumes compared to the previous year, with 984,077 financed motors hitting the road in 2015.

But along with the escalating number of financed cars comes a fatter risk for used buyers, with My Car Check posting a sixteen per cent rise in the number of unpaid finance alerts coming up on its system requiring further investigation.

The ten per cent increase exposed by the FLA accounts for private car finance volumes only, it does not include the half a million business registered vehicles that were also bought on finance last year.

Buoyed by an very active December, the latest figures displayed a twenty two per cent increase for private-car finance in the final month of two thousand fifteen alone.

The percentage of fresh model sales financed at dealerships reached 81.Four per cent in 2015, up from 75.9 per cent the year before.

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That means eight in ten of all fresh cars that went on the road during the twelve months in two thousand fifteen were not purchased outright by the driver.

There was also an eight per cent growth in the used car finance market, with 1.15 million second-hand motors being acquired through attractive deals last year.

Geraldine Kilkelly, head of research and chief economist at the FLA, said the figures came as no surprise, and expected a repeat in growth this year.

‘It was another record year for the point-of-sale consumer car finance market as fresh business volumes reached more than Two.1 million,’ Kilkelly said.

‘But while growth in two thousand fifteen remained sturdy, it was slower than in 2014, and in line with expectations.

‘The strength of the market in December reflects strong consumer confidence buoyed by low inflation, interest rates and unemployment.

‘The FLA’s latest retail motor finance confidence survey suggests that we will see fresh business growth in two thousand sixteen of up to ten per cent.’

But the full salute number of financed motors on the road is causing major concern on the second-hand-car market, with My Car Check claiming a ‘acute rise in used car buying risks’ due to outstanding finance.

It said that forty eight per cent of all checks carried out on cars in January flagged up at least one issue, up six per cent on the same month in 2015.

This could be anything from a flawlessly legal registration plate transfer to a major issue such as a previous write-off.

But most worrying was the sixteen per cent year-on-year increase in the proportion of finance alerts warranting further investigation.

Roger Powell, head of vehicle-check provider, said: ‘These fresh figures illustrate the switching nature of used car buying, particularly in the private marketplace.

‘The popularity of Individual Contract Purchase finance has enlargened the risk of buying a 2nd palm car with thousands of pounds of debt linked to it.’

The average retail value of cars checked using the service have risen by £758 over the last twelve months, from £7,072 in January two thousand fifteen to £7,830 this year.

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