The total number of new cars sold on finance shrank 4%, year-on-year in January, to 61,204, Finance & Leasing Association (FLA) figures have shown.

Despite this drop, the total value of the finance increased 4% over the same period to £1.17bn.

The percentage of private new car sales financed by FLA members through the POS was 88.5% in the twelve months to January, compared with 88.2% in the twelve months to December 2017.

In contrast, the used car finance market had a bumper month, with double digit growth by both value and volume.

131,870 cars were bought on finance, up 13% year-on-year, with the value of advances reaching £1,544m – up 20%.

As a result of the growth in used cars, the total market posted healthy growth in January. A total of 193,074 cars were sold on finance (up 7%), with the value of finance reaching £2,711m (up 13%).

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “New business trends in the POS consumer car finance market continued in a similar vein to 2017. In the twelve months to January, overall new business volumes in this market held steady at almost 2.4 million.”