The number of new vehicles purchased on finance by businesses saw a 28% year-on-year decline in August, according to the latest figures from the Finance & Leasing Association (FLA).
The figures for used cars bought on finance by businesses painted a similar picture, with a total of 3,729 cars bought – representing a 22% decline from a year ago.
The consumer car finance market showed more promising signs, with new business seeing year-on-year growth of 1% by volume and 8% by value in August.
The consumer used car finance market reported growth in new business of 2% by volume and 10% by value in August 2020 compared with the same month in 2019. In the eight months to August 2020, new business volumes in this market fell by 22% compared with the same period in 2019.
The consumer new car finance market reported new business volumes 1% lower in August than in the same month in 2019, while the value of new business grew by 5% over the same period. In the eight months to August 2020, new business volumes in this market fell by 33% compared with the same period a year earlier.
The percentage of private new car sales financed by FLA members in the twelve months to August 2020 held steady at 93.5%.
Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “It is encouraging to see further growth in the consumer car finance market, which shows the underlying strength of the market despite the disruption caused by the Covid-19 crisis.
“However, the near-term outlook for demand and employment is highly uncertain as new restrictions are imposed to deal with the ongoing crisis. It is more vital than ever that the government and Bank of England support all lenders, including non-banks, by removing obstacles that still exist around access to funding. This will ensure that the motor finance industry is able to meet the ongoing demand for forbearance and new credit.”
The latest figures come after the car finance market returned to growth in July, with new business in the consumer car finance market grew 19% by value and 9% by volume.