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The performance compares favourably with that for the three months to August (down 3 per cent) and the year to August (down 19 per cent.)

"Motor finance companies are telling us that the impact of the car scrappage scheme on finance sales has been limited.

Small cars

"Motorists tend to opt for buying small cars and pay the balance from any part exchange under the scrappage scheme with their savings, rather than by using car finance," said FLA chief economist and head of research Geraldine Kilkelly.

The used car finance sector suffered in August with the number of cars sold on consumer finance falling 23 per cent, compared to a decline of 13 per cent in the three months to August and 15 per cent in the year to August.

Call for help

While the FLA welcomed the rise in new car sales, it repeated its call for the government to improve wholesale funding for the car sector.

"For the longer term health of the market, we still need to see progress from the Government in dealing with the wholesale funding issue," said Kilkelly.

A recent FLA survey found 65 per cent of its members said the threat to their businesses fro the high cost of funding remained severe.

DATED: 19.10.09

FEED: MT