A sudden drop in new vehicle sales is leading dealers to offer higher-risk finance deals to keep the market alive, Bank of England economists have said. In an attempt to gain customers, sales staff are being asked by manufacturers to offer larger discounts, but economists are warning that the car finance market would be highly vulnerable in the event of an economic downturn. The latest figures from the Office for National Statistics show a fall in new-car registrations last month compared with January and February, which was blamed on falling demand as consumers waited longer than usual for their cars
A sudden drop in new vehicle sales is leading dealers to offer higher-risk finance deals to keep the market alive, Bank of England economists have said. In an attempt to gain customers, sales staff are being asked by manufacturers to offer larger discounts, but economists are warning that the car finance market would be highly vulnerable in the event of an economic downturn. Car finance is usually based on personal contract purchase deals that can allow customers to buy a car without even paying a deposit.