JUNE saw the first growth in the consumer new car finance market since February of this year, and continued strong growth in the business new car finance market.
The easing of supply issues in the first half of 2023 contributed to a much-improved performance in the new car finance market overall as new business volumes grew by 5%.
New figures released by the Finance and Leasing Association (FLA) show that consumer car finance new business volumes fell in June 2023 by 2% compared with the same month in 2022. The corresponding value of new business grew by 2% over the same period. In the first half of 2023, new business fell 5% by value and 6% by volume compared with the same period in 2022.
The consumer new car finance market reported growth in new business of 14% by value and 11% by volume in June compared with the same month in 2022. In the first half of 2023, new business volumes in this market were 6% lower than in the same period in 2022.
The consumer used car finance market reported a fall in new business in June of 7% by both value and volume compared with the same month in 2022. In the first half of 2023, new business volumes in this market were 5% lower than in the same period in 2022.
Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The consumer used car finance market proved resilient in the first half of 2023 despite tougher economic conditions and following a record first half of 2022.
“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”
Mark Oakley, Director of AA Cars, said: “Sunny weather may be in short supply in the UK but the new car market has definitely warmed up this summer. After a subdued start to the year, double-digit annual growth in both new car finance volumes and value, suggests many drivers have finally taken off the handbrake and decided the time is right for a fresh set of wheels.
“They have also been encouraged to the forecourts by the easing of supply issues which dogged several manufacturers, giving them a full menu of motors to choose from.
“While the amount of loans for used cars fell in June, they are only slightly down on the record highs achieved in the first half of 2022. The desire to trade in remains strong despite the economic uncertainty.”
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