Consumer car finance market fell 1% by value and 11% by volume in October 2021

New figures released today by the Finance & Leasing Association (FLA) show that the consumer car finance market reported a fall in new business of only 1% by value, but 11% by volume in October 2021 compared with the same month in 2020. In the ten months to October 2021, new business volumes were 7% higher than in the same period in 2020.

The consumer new car finance market reported a fall in new business of 8% by value and 13% by volume in October compared with the same month in 2020. In the ten months to October 2021, new business volumes in this market were 4% higher than in the same period in 2020.  The percentage of private new car sales financed by FLA members in the twelve months to October 2021 was 93.0%, a similar level to the same period in 2020.

The consumer used car finance market reported new business up 4% by value, but 10% lower by volume in October compared with the same month in 2020. In the ten months to October 2021, new business volumes in this market were 9% higher than in the same period in 2020.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:

“The latest consumer car finance market data reflects the ongoing supply shortages of new and used cars. The average advance to consumers for used car purchases reached £15,000 in October as high demand combined with supply pressures saw used car prices grow by almost 23% during the same period.

The car finance market was quick to recover as the economy opened up, with the value of annual new business in the consumer used car finance market in October only 1% below the pre-pandemic peak. However, the pace of recovery has been hampered by supply shortages which are likely to persist into 2022 as countries across the world contend with new waves and variants of Covid-19.”