Figures from the Finance & Leasing Association (FLA) reveal an 8% decrease in consumer car finance new business volumes for December 2023 compared to the same month in 2022.
The corresponding value of new business also saw an 8% decline during this period.
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Over 2023, new business in terms of value and volume experienced a 5% and 6% reduction, respectively, in contrast to the figures from 2022.
Specifically, the consumer new car finance market witnessed a 12% drop in new business by value and a 13% decrease by volume in December, as opposed to the corresponding month in 2022.
For 2023, new business volumes in this market were 6% lower than those recorded in 2022.
In the consumer used car finance market, new business reported a 5% decline in both value and volume in December 2023 compared to the same month in 2022.
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By GlobalDataLooking at the whole of 2023, new business volumes in this market were 6% lower than the figures documented in 2022.
Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: "The consumer car finance market reported a modest fall in both the value and volume of new business in 2023. The value of new business in this market, at almost £39bn, was the second highest on record."
Kilkelly noted the increase in consumer confidence as the outlook for personal finances improved, yet cautioned that consumer spending is expected to remain restrained in the coming year.
The FLA's latest forecasts suggest a modest growth of around 2% in new business for the point-of-sale consumer car finance market in 2024. Kilkelly concluded, "As always, customers concerned about meeting payments should speak to their lender as soon as possible to find a solution."
In 2023, FLA members provided £151 billion of new finance to UK businesses and households. £113 billion of this was in the form of consumer credit, almost a third of the total new consumer credit written in the UK in 2023. £52 billion of it supported the purchase of new and used cars, including over 78% of private new car registrations.
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