Attractive 0% APR deals helped convince more than 33,000 people to buy a car on dealer finance in January, according to the Finance and Leasing Association (FLA).
New-car buyers borrowed 459 million on finance deals, an increase of 42% on January 2011.
Used car buyers also bought more cars on finance dealers reported a 14% increase in the number of used cars sold with finance in January, compared with the same period in 2011, while the business finance market recorded a 19% increase in such purchases.
The reason for the increase is largely down to low-rate APR deals that are being offered by finance providers, with an increasing number offering deals at 0% interest.
For example, buyers can currently get 0% APR deals on:
Motor finance providers are also accepting smaller deposits from customers, making the finance route more appealing.
Paul Harrison, head of motor finance at the FLA, said: 'These figures are striking for January, when customers often cut back after Christmas. Good offers have attracted customers, and people have taken full advantage of the low rates available on motor finance.'