Consumer car finance market returns to growth in July

New figures released today by the Finance & Leasing Association (FLA) show that new business in the consumer car finance market grew 19% by value and 9% by volume in July 2020 compared with the same month in 2019. In the seven months to July 2020, new business volumes in this market remained 30% lower than in the same period in 2019.

The consumer new car finance market reported growth in new business of 20% by value and 9% by volume in July 2020 compared with the same month in 2019. In the first seven months of 2020, new business volumes in this market were 36% lower than in the same period a year earlier. The percentage of private new car sales financed by FLA members in the twelve months to July 2020 was 93.5%, up from 91.6% in the same period last year.

The consumer used car finance market reported growth in new business of 18% by value and 9% by volume in July 2020 compared with the same month in 2019. In the first seven months of 2020, new business volumes in this market fell by 26% compared with the same period in 2019.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “July saw the consumer new car finance market report growth for the first time this year. Both consumer new and used car finance markets saw new business volumes return to normal levels in July after the record-lows reported in April.

“The pick-up in the economy since June has been encouraging, but the sustainability of the recovery remains in doubt. Our latest research suggests that new business in the consumer car finance market is likely to fall by 20% in 2020 as a whole. We continue to urge the Government and Bank of England to ensure that there is adequate support for all lenders so that they can meet the ongoing demand from customers for forbearance and at the same time meet demand for new credit during what will be a difficult period for the economy.”