Credit, Collections & Insolvency News
New figures released by the Finance & Leasing Association (FLA) show that consumer car finance new business volumes fell in August 2024 by 2% compared with the same month in 2023. The corresponding value of new business fell by 1% over the same period. In the eight months to August 2024, new business was 2% lower by both value and volume compared with the same period in 2023.
The consumer new car finance market reported new business by value in August 13% higher than in the same month in 2023, while new business volumes grew by 7%. In the eight months to August 2024, new business volumes in this market were 6% lower than in the same period in 2023.
The consumer used car finance market reported a fall in the value of new business in August of 7% compared with the same month in 2023, while new business volumes fell by 4%. In the eight months to August 2024, new business volumes in this market were 1% lower than in the same period in 2023.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “August saw the consumer new car finance market report only its second month of growth in new business volumes since the beginning of this year. Overall, the point-of-sale consumer car finance market has seen a modest contraction in new business by both value and volume so far in 2024.
“The FLA’s Q3 2024 Industry Outlook Survey suggested that motor finance providers are cautiously optimistic of an improvement in economic conditions, with three-quarters expecting some increase in new business over the next twelve months.”
Mark Attwell, Director at AA Car Finance, said “Summer is traditionally a quieter period for new car sales and it seems this has filtered through to the car finance market.
“Despite a recent drop in interest rates and an easing of inflationary pressures, consumer appetite for financing new vehicles fell in August. This slowdown may be down to the usual seasonal factors, but it could also suggest that consumers are hesitant to commit to big-ticket purchases, such as new cars.
“Hopefully we will see a positive end to the quarter as industry data shows that car sales picked up in September with the arrival of the new 74 plate. Longer term, if the Bank of England does move ahead with further rate cuts as expected, then we should see an increase in car finance sales.
“In a lower interest rate environment, financing becomes an even more attractive option for the majority of budget-conscious, new car buyers as it reduces the cost of their monthly payments.”
| Cars bought on finance by consumers through the point of sale | ||||||
| New business | Aug 2024 | %
change on prev. year |
3 months to Aug 2024 |
% change on prev. year | 12 months to Aug 2024 | % change on prev. year |
| New cars | ||||||
| Value of advances (£m) | 977 | 13 | 3,911 | 2 | 17,058 | 2 |
| Number of cars | 35,386 | 7 | 139,156 | -5 | 618,524 | -5 |
| Used cars | ||||||
| Value of advances (£m) | 1,789 | -7 | 5,340 | -7 | 21,391 | -5 |
| Number of cars | 121,782 | -4 | 361,213 | -4 | 1,446,861 | -3 |
| Total cars | ||||||
| Value of advances (£m) | 2,766 | -1 | 9,250 | -3 | 38,450 | -2 |
| Number of cars | 157,168 | -2 | 500,369 | -4 | 2,065,385 | -3 |
| Cars bought on finance by businesses | ||||||
| New business | Aug 2024 | %
change on prev. year |
3
months to Aug 2024 |
% change on prev. year | 12 months to Aug 2024 | % change on prev. year |
| New cars | ||||||
| Number of cars | 21,037 | -30 | 76,449 | -20 | 362,294 | 6 |
| Used cars | ||||||
| Number of cars | 3,727 | -26 | 17,186 | 0 | 61,201 | -3 |