Car finance customers beat credit crunch

The availability of competitive car finance arrangements has seen a surge in car sales, bucking the current market trend. The 'credit crunch' has generally seen a souring of consumer mood and decline in customer spending, but increased options for car finance customers are defying that trend. There has been an upsurge in car buyers choosing to protect themselves by buying their cars on car loan and finance schemes that guarantee the future value of their car. In contrast to the insecurity of the current economic climate, Personal Contract Plans or PCP schemes offer fixed cost motoring with a guaranteed value for a car at the end of the term, protecting the customer from excessive depreciation. Motorpoint, a leading car supermarket, has recently seen a 16% rise in the number of customers buying cars on their Boomerang car finance scheme. Motorpoint Spokesperson John Gillespie said: "Customers are often shocked by how much their car has depreciated in two or three years, and have not budgeted for this." They are, he explained, often thus forced to downgrade or part with yet more cash as a result. An effective PCP scheme enables a customer to budget accurately, and means that market forces that the customer cannot control will not leave them financially penalised when they come to change vehicles.