The number of new car finance sales increased in January this year, compared with last year, it has been reported.

New motor finance figures released by the Finance and Leasing Association (FLA) showed that the number of customers buying new cars through dealer finance rose by 23 per cent in January 2010.

Used car finance sales were down, with 19 per cent fewer sold through dealer finance than in 2009.

All sales were affected at the beginning of the year by the return to the 17.5 per cent VAT rate and the severe weather conditions, which meant fewer people visiting car showrooms.

There was a decrease in business new car finance sales too. Data showed they dropped by 23 per cent, which, according to the FLA, was due to businesses not renewing their fleets as frequently.

Although weaker than in 2009, the motor finance sector still accounts for 45 per cent of all new car sales.

Figures released by the European Automobile Manufacturers’ Association (ACEA) last week showed that car production in Europe was at its lowest level in 13 years.

The ACEA did note that demand for cars still remained with fleet renewals and the scrappage scheme boosting it.

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