The UK consumer car finance market saw a 10% decline in August 2021, compared with the same month in 2020, according to statistics from the Finance and Leasing Association (FLA).

In the eight months to August 2021, new business volumes remained 16% higher than in the same period in 2020.

The consumer new car finance market reported a fall in new business of 13% by value and 18% by volume in August, when compared with August 2020.   In the eight months to August 2021, new business volumes in this market were 16% higher than in the same period in 2020.

The percentage of private new car sales financed by FLA members in the twelve months to August 2021 was 93.3%, down from 93.7% in July.

The consumer used car finance market reported a fall in new business volumes of 7% in August compared with the same month in 2020, while the value of new was at a similar level to August 2020.  In the eight months to August 2021, new business volumes in this market were also 16% higher than in the same period in 2020.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “Supply issues in the new car market caused by the shortage of semi-conductors continue to hamper the recovery of the automotive industry following the pandemic.  New business volumes in the consumer new car finance market fell for a second consecutive month in August and the near-term outlook is likely to be weaker than previously expected.

“By contrast, the consumer used car finance market remains relatively strong, with annual new business by value in August only 1% below its pre-pandemic peak. The results signal the second consecutive month of decline for the finance market, following a 20% decline in July.