The consumer car finance sector witnessed a dip in new business volumes, indicating a nuanced trend in October 2023, according to the latest data by the Finance & Leasing Association (FLA).

Comparing this period with the same month in 2022, new business volumes experienced a 3% contraction, accompanied by a 2% decline in the corresponding value. 

This trajectory extends over the ten months leading up to October 2023, with new business volumes remaining persistently 6% lower than the equivalent period in 2022.

Specifically dissecting the consumer new car finance market, a subtle difference emerges. While new business reported a 1% increase by value, there was a 2% decrease in volume in October 2023 when measured against the same month in 2022. 

This pattern echoes over the broader ten-month scope, revealing a 5% decline in new business volumes compared to the same period in 2022.

Turning attention to the consumer used car finance market, October 2023 saw a noteworthy 5% decline in new business by value and a 4% reduction by volume compared to October 2022. 

The overarching trend for the ten months leading to October 2023 indicates a consistent 6% decrease in new business volumes when compared to the corresponding period in 2022.

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The consumer car finance market remains remarkably resilient despite the subdued economic outlook, with the value of new business expected to be only 4% lower in 2023 than in 2022.   

“FLA’s latest research also suggests that the value of consumer car finance new business in 2024 is expected to grow by 2% to £40.1 billion. The value of new business provided to consumers for new car purchases is forecast to grow by 9% in 2024 to £18.9 billion, while consumer used car finance new business by value is expected to fall by 4% in 2024 to £21.2 billion.

“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”