The number of new cars sold on finance in April plummeted 28% year-on-year, according to the Finance & Leasing Association (FLA).

The total number of new cars sold on finance was 61,434. As a result, the penetration rate of finance in the new car sector fell to 86.2% for the past 12 months, down from 86.5% in the twelve months to March April was a tough month in general for new car sales, as Society of Motor Manufacturers and Traders (SMMT) figures showed new car sales also experienced a sharp contraction in the month, explaining some of the fall in the finance figures.

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The finance was worth £1,174m, which was 19% less than the value recorded in the same month last year.

For the 12 months to the end of April, the number of cars sold on finance remained broadly flat, at 1,030,839, while the value of the finance sold remained up, by 6%.

Used car figures

The numbers were slightly more positive in the used car market. Here, 109,244 cars were sold on finance, down just 1% year-on-year. The value was £1,204m, up 4% compared to April 2016.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The fall in new business volumes reported by the POS consumer new car finance market is in line with recent trends in private new car sales. Many customers brought forward their car purchases ahead of changes to vehicle excise duty effective from 1 April.

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“In the first four months of 2017, POS consumer car finance new business volumes were 1% higher than the same period last year. We expect broadly stable new business volumes in this market in 2017 as a whole.”