The UK consumer car finance market saw a 20% year-on-year fall in new business volumes in July, according to the latest data from the Finance & Leasing Association (FLA).

The consumer new car finance market reported a fall in new business volumes of 20% in July compared with the same month in 2020, while the value of new business decreased by 19%. In the first seven months of 2021, new business volumes in this market remained 20% higher than in the same period in 2020.

The percentage of private new car sales financed by FLA members in the twelve months to July 2021 was 93.6%, up from 93.2% in June.

The consumer used car finance market reported a fall in new business volumes of 19% in July compared with the same month in 2020, while the value of new business decreased by 16%.  In the first seven months of 2021, new business volumes in this market were also 20% higher than in the same period in 2020.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “Supply side shortages – both of vehicles and labour – have hit the automotive industry in recent months.  With most consumer new car sales now financed by FLA members it is not surprising that the consumer new car finance market followed recent trends in private new car registrations which fell by a quarter in July. Moreover, July 2020 was a record month for the consumer used car finance market following the lifting of the first lockdown restrictions which was unlikely to be replicated this year.

“Our latest research suggests consumer car finance new business by value will grow by 17% in 2021 as a whole, slightly lower than previous expectations.  The consumer car finance market is expected to growth by a further 14% in 2022 as supply constraints gradually ease and strong consumer demand continues.”