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FLA reports further fall in car finance new business volumes

Introduction of new restrictions during October to curb the growth in coronavirus cases has led to a softening in demand for consumer car finance.  The fall in the used car finance market in October was the first since May of this year.
US car finance new car sale

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December 7, 2020

LATEST figures released by the Finance and Leasing Association (FLA) show that the consumer car finance market reported a fall in new business volumes of 3% in October 2020 compared with the same month in 2019.

In the ten months to October 2020, new business volumes in this market were 20% lower than in the same period in 2019.

For new car finance, business volumes were down 4% during the month compared with the same month in 2019, and down 25% year-on-year. The percentage of private new car sales financed by FLA members in the twelve months to October 2020 was 94.1%, up from 91.7% in the same period in 2019. The consumer used car finance market reported a fall in new business volumes of 2% in October and down 17% in the ten months to October.

Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The introduction of new restrictions during October to curb the growth in coronavirus cases has led to a softening in demand for consumer car finance.  The fall in the used car finance market in October was the first since May of this year.

“The economic outlook has improved following the promised rollout of a vaccine before Christmas. Based on this more positive outlook, our latest research suggests that consumer car finance new business by value is likely to grow by 18% in 2021, following a contraction of 20% in 2020 as whole.”

 

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

Oct 2020

% change on prev. year

3 months to Oct 2020

% change on prev. year

12 months to Oct 2020

% change on prev. year

New cars            
Value of advances (£m)

1,416

0

5,358

6

16,128

-17

Number of cars

63,647

-4

241,586

1

730,540

-22

Used cars

Value of advances (£m)

1,640

3

5,221

9

16,519

-10

Number of cars

125,965

-2

398,756

4

1,280,399

-14

Total cars
Value of advances (£m)

3,056

2

10,579

8

32,647

-14

Number of cars

189,612

-3

640,342

3

2,010,939

-17

 

Cars bought on finance by businesses
New business

Oct 2020

% change on prev. year

3 months to Oct 2020

% change on prev. year

12 months to Oct 2020

% change on prev. year

New cars          
Number of cars

27,851

-24

77,089

-16

274,789

-37

Used cars
Number of cars

5,450

21

14,474

10

57,581

3

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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