The consumer new car finance market reported a fall in new business of 16% by value and 21% by volume year-on-year in June, according to the latest figures from the Finance and Leasing Association (FLA).
In the first half of 2020, new business volumes in the new car finance market fell by 42% compared with the same period in 2019. The percentage of private new car sales financed by FLA members held steady in the twelve months to June 2020 at 94.3%.
In contrast, new business in the consumer used car finance market grew 9% by value and 2% by volume year-on-year in June. In the first half of 2020, this market reported new business volumes 32% lower than in the same period in 2019.
Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The consumer used car finance market led the recovery in June as showrooms began to re-open. Monthly new business volumes in this market were back to normal levels following the record low reported in April. The consumer new car finance market has taken a little longer to bounce back, but new car registrations figures suggest the market returned to growth in July.
“While the latest FLA figures are encouraging, the economic outlook remains highly uncertain. The motor finance market is faced with a prolonged period of significant demand for forbearance. To meet this and the pent-up demand for new credit, we continue to urge the Government and Bank of England to ensure that all lenders, including non-banks, have access to financial support schemes.”
Last month, the FLA published its recovery plan for the UK economy, recommending a phased approach of short, medium and long-term measures.
Stephen Haddrill, director general of the FLA, said: “The chancellor’s Economic Statement set out a range of short-term stimuli, but these measures need to be consolidated with substantive plans for long-term growth – and all of this must start with ensuring that the UK’s providers of business and consumer finance are in a position to lend.”