Asset finance grows by 11%

New figures released by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) grew in March 2025 by 11% compared with the same month in 2024.  In Q1 2025, new business was 5% higher than in Q1 2024.

The business new car finance sector reported new business up in March by 19% compared with the same month in 2024. The business equipment finance and plant and machinery finance sectors reported new business growth of 34% and 8% respectively, over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “The asset finance market reported its highest level of new business in March for two years and the second highest monthly total on record. The recovery in the business new car finance sector was supported by the issue of a new registration plate and customers bringing forward purchases ahead of increases in vehicle excise duty from April 2025.

“March saw a pick-up in new asset finance lending to SMEs which grew by 16% compared with the same month in 2024, while new lending to larger businesses increased by 5%.

“The asset finance market returned a strong performance in Q1 2025 despite a challenging economic environment and greater uncertainty about the outlook. Further cuts in interest rates should help those businesses in a position to invest as they focus on driving growth through the use of greener assets and more efficient technology. The asset finance industry provides significant support to businesses of all sizes, funding a third of UK investment in vehicles, machinery and equipment in 2024.”