New figures released by the Finance & Leasing Association (FLA) has shown that the consumer car finance market reported a fall in new business volumes of 20% in July 2021 compared with the same month in 2020. In the first seven months of 2021, new business volumes were 20% higher than in the same period in 2020.

The consumer new car finance market reported a fall in new business volumes of 20% in July compared with the same month in 2020, while the value of new business decreased by 19%. In the first seven months of 2021, new business volumes in this market remained 20% higher than in the same period in 2020.  The percentage of private new car sales financed by FLA members in the twelve months to July 2021 was 93.6%, up from 93.2% in June.

The consumer used car finance market reported a fall in new business volumes of 19% in July compared with the same month in 2020, while the value of new business decreased by 16%.  In the first seven months of 2021, new business volumes in this market were also 20% higher than in the same period in 2020.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “Supply side shortages – both of vehicles and labour – have hit the automotive industry in recent months.  With most consumer new car sales now financed by FLA members it is not surprising that the consumer new car finance market followed recent trends in private new car registrations which fell by a quarter in July. Moreover, July 2020 was a record month for the consumer used car finance market following the lifting of the first lockdown restrictions which was unlikely to be replicated this year.”

“Our latest research suggests consumer car finance new business by value will grow by 17% in 2021 as a whole, slightly lower than previous expectations.  The consumer car finance market is expected to growth by a further 14% in 2022 as supply constraints gradually ease and strong consumer demand continues.”

 Cars bought on finance by consumers through the point of sale
New business

Jul 2021

% change on prev. year

3 months to Jul 2021

% change on prev. year

12 months to Jul 2021

% change on prev. year

New cars

Value of advances (£m)

1,385

-19

4,783

43

17,897

13

Number of cars

60,520

-20

205,166

38

770,753

6

Used cars

Value of advances (£m)

1,652

-16

5,180

28

18,333

14

Number of cars

119,273

-19

380,070

24

1,374,554

9

Total cars

Value of advances (£m)

3,037

-18

9,963

35

36,230

14

Number of cars

179,793

-20

585,236

29

2,145,307

8

Cars bought on finance by businesses
New business

Jul 2021

% change on prev. year

3 months to Jul 2021

% change on prev. year

12 months to Jul 2021

% change on prev. year

New cars
Number of cars

27,647

13

89,437

101

321,827

12

Used cars
Number of cars

3,914

-26

11,461

0

52,299

-7