Spring is in the air and for those tempted to trade in their clapped-out old banger for a shiny new model, there are plenty of car-finance options now available.

Although the motor industry headed into 1999 with a degree of trepidation, fears that the desire to have a 00 registration would lead customers to postpone the purchase of a car until next year have proved unfounded to date.

"Business is flying," says Ms Elaine Darcy, marketing officer with AIB Finance & Leasing. "People thought there might be a slowdown but we are not finding that at all."

The Society of the Irish Motor Industry (SIMI) notes that car sales in the first two months of the year were 22 per cent above 1998 levels. SIMI chief executive, Mr Cyril McHugh, points out that 40 per cent of sales are corporate and are not really sensitive to the year on the number plate.

He also notes that some car-owners will be reluctant to postpone the purchase of a new vehicle as it means that existing cars will depreciate further, reducing their trade-in value and off-setting the benefits of waiting for 2000.

However, the jury is out on what will happen in the second half of the year.

"It's very hard to call but I would expect the market to be slower in the second half than at present," says one industry source. "The normal pattern is likely to be more extreme this year with the front weighting of sales more pronounced."

A number of firms have taken measures to tackle the 2000 issue. Nissan, for example, is promising purchasers of the Primera, Almera or Micra that if they buy a car in 1999, it will take it back and give them a brand new one next year.

Customers have to pay the full recommended retail price for the car - so they will not be able to avail of cash discounts or trade-ins. But the savings they make on depreciation could outweigh those foregone at the time of purchase down the line.

For those happy to take the plunge this year, there are a plethora of financing options now available and low interest rates mean that most of the options are more competitive than ever.

In addition to a traditional car loan, consumers can avail of a number of other financing options including leasing and hire purchase, with the latter proving particularly popular at present.

Some institutions are also considering the introduction of another financing alternative to the personal market. Contract hire, which is available only to business customers, allows the consumer to buy a service rather than a vehicle as the lessor accepts responsibility for depreciation, funding costs and the administration of the vehicle.

With this method of finance, the customer can hire a brand new car for a period such as two years. The residual value of the car is set before the agreement is entered into. Thus, if a car worth £10,000 goes back with a residual value of £6,000 after two years, the bank charges the consumer £4,000 over that period.

However, it could be some time before contract hire is extended to the personal market. In the meantime, consumers have to decide whether to go for a loan, a lease or a hire-purchase agreement which basically differ in terms of ownership. With a loan, the customer assumes ownership of the vehicle from the beginning whereas under a hire purchase agreement, ownership is not usually transferred until a certain number of repayments have been made.

Under the terms of a lease plan, the lessor owns the vehicle. Lease agreements are most popular with businesses which can reclaim the VAT on rentals. Among the advantages is that there is no ownership risk involved and the lease is secured against the asset in question so the consumer does not need to provide other security. In addition, opting for a lease can free up lines of credit, allowing consumers to avail of loans for other purposes.

There can also be slight differences in cost between the various financing packages. AIB Finance & Leasing says that someone interested in a car costing £10,000, with no-trade-in or deposit, would currently face a monthly repayment of £307.86 under the terms of a hire purchase agreement. This rises to £316.00 per month for either a standard personal loan or a lease. If payment protection is included, the lease option comes out cheapest at £319.76 per month compared to £320.17 with hire purchase and £328.64 with a loan.

Many distributors are also offering attractive finance packages, geared particularly toward the smaller end of the market. However, observers warn consumers to be aware of the balloon or final payments that must sometimes be made before they own the car.

In addition to being cheaper, car finance is also easier to get than it used to be. Woodchester, which provides both hire purchase and leasing arrangements, says it can approve a loan in less than an hour, often in as little as 30 minutes.

Many of the loan packages on offer also come with added-extras such as free insurance, free road tax or one-year's free membership of the AA.