Research conducted by Mintel has estimated 9 per cent of the UK's 16.5m mortgage holders could be considered sub-prime by lenders – potentially bad news for the car market.

Motor industry finance analyst Graham Filmer said, however, that dealers can help themselves out of such looming crises by focusing on their own finance and insurance offers to consumers.

“Dealers must work to create consumer confidence in what is a discretionary spend for a good many,” he said. Filmer advised dealers to push Hire Purchase at point of sale, as this type of finance offered by the businesses has a higher approval rating than personal loans from banks. “Dealers should start selling it more aggressively,” he said. GE Money Motor Finance has encouraged the same approach. “Finance at the point of sale remains a too often overlook opportunity,” said CEO Brendan Devine. “For those who do need to borrow, it is well worth remembering that secured finance typically offers a higher acceptance rate than unsecured lending.”

While the current economic climate is a concern for many, Devine suggested dealers focus on areas of the market that are emerging. “Rising interest rates have dampened the disposable income for those with mortgages,” he said. “But on the other hand, for the growing numbers of those with no mortgages, it is important to remember that their income will have increased, provided they have well invested savings, so certainly reaching out to the 'empty nesters' provides an opportunity.” Philip Wade, managing partner at HWB International, also said the outlook wasn't as gloomy as it may seem. “As far as the market's going, one is expecting to have a mild slow-down in 2008, but I don't think we have any thing like the sub-prime car financing that the US is suffering from,” he said.