The consumer car finance market saw a year-on-year decline of 24% in new business volumes in November, according to the latest figures from the Finance & Leasing Association (FLA).
The data found that in the eleven months to November 2020, new business volumes in this market were 20% lower than in the same period in 2019.
The new car finance market reported a fall in new business volumes of 27% in November 2020, when compared with the same month in 2019. In the eleven months to November 2020, new business volumes in the new car market fell by 25% compared with the same period a year earlier.
The percentage of private new car sales financed by FLA members in the twelve months to November reached 94.5%.
The used car finance market reported a fall in new business volumes of 23% in November 2020 compared with the same month in 2019. In the eleven months to November 2020, new business volumes in this market fell by 17% compared with the same period a year earlier.
Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The fall in new business volumes in November reflects the closure of many showrooms as further restrictions were introduced to deal with rising cases of Covid-19.
“UK-wide lockdowns during the first quarter of 2021 mean that the near-term outlook remains challenging. The motor finance industry will continue to support households and businesses during that time and as the economy recovers, as evidenced by the £30 billion of new finance provided to them by FLA members since the pandemic began.”
In December, Motor Finance spoke to Adrian Dally, head of motor finance at the FLA, who highlighted the shortcomings of the Consumer Credit Act as the popularity of EVs grow. “FLA members currently fund 94% of all new cars purchased by consumers.
“Those same consumers will soon be switching to ultra-low emission vehicles in greater numbers ahead of the 2030 ban on the sale of new petrol and diesel engine cars, but lenders who are already offering finance on ULEVs are having to do so using the Consumer Credit Act which does not allow for PCP and HP agreements to be linked to more than one asset – and that’s a problem because the battery in ULEVs is an asset in its own right.
“This needs to be fixed so that the regulation governing the sale of motor finance can better facilitate the switch to ULEVs, rather than adding a layer of complexity to the process.”