Car finance market grew by 327% in May

New figures released by the Finance & Leasing Association (FLA) show that the consumer car finance market reported growth in new business volumes of 327% in May 2021 compared with the same month in 2020.  In the first five months of 2021, new business volumes were 37% higher than in the same period in 2020.

The consumer new car finance market reported new business volumes up by 514% in May compared with the same month in 2020, while the value of new business grew by 555%. In the first five months of 2021, new business volumes in this market were 32% higher than in the same period in 2020.  The percentage of private new car sales financed by FLA members in the twelve months to May 2021 was 92.9%.

The consumer used car finance market reported new business volumes up by 270% in May compared with the same month in 2020, while the value of new business grew by 293%.  In the first five months of 2021, new business volumes in this market were 39% 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 recovery in the consumer car finance market continued in May as consumers have become more optimistic of a strong economic recovery.  The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with Covid-19 during the first lockdown and we expect these to moderate in the coming months.”

“Risks to the recovery remain from ongoing restrictions that may be needed to deal with the pandemic, the impact on confidence and unemployment once Government support schemes end, and increasing inflationary pressures. Nevertheless, we currently expect the industry to return to more normal new business levels during the second half of 2021.”

Cars bought on finance by consumers through the point of sale
New business	May 2021	% change on prev. year	3 months to May 2021	% change on prev. year	12 months to May 2021	% change on prev. year
New cars
Value of advances (£m)	1,578	555	5,690	104	17,802	13
Number of cars	65,635	514	235,609	86	769,339	5
Used cars
Value of advances (£m)	1,747	293	5,105	179	18,490	19
Number of cars	130,899	270	380,972	161	1,396,044	12
Total cars
Value of advances (£m)	3,325	385	10,795	134	36,292	16
Number of cars	196,534	327	616,581	126	2,165,383	9
Cars bought on finance by businesses
New business	May 2021	% change on prev. year	3 months to May 2021	% change on prev. year	12 months to May 2021	% change on prev. year
New cars
Number of cars	26,882	363	93,140	89	298,001	-11
Used cars
Number of cars	3,632	43	13,675	-14	53,368	-6