New car finance grew by just 1% year-on-year by both volume and value in July, according to the Finance & Leasing Association (FLA).

The 71,494 cars bought on finance and £1,171m worth of advances represented just a small amount of growth compared to the same month last year.

While this still represented some growth, these figures continued the recent trend of car finance growth slowing down. The last three months have seen new car finance volumes grow by 5% in June, 8% in May and 12% in April.

This growth occurred in the context of falling private sales, however, and as a result POS finance penetration increased for the past 12 months increased from 84.9% in the twelve months to June up to 85.3% in the twelve months to July.

The used car sector faired only a little better. 103,554 used cars were bought on finance in July, also just 1% above the same month last year, however the value of advances increased 2%, to £1,110.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The performance of the POS consumer new and used car finance markets remains in line with our expectations for 2016 as a whole. The FLA’s Q3 2016 retail motor finance confidence survey suggests that new business levels will remain broadly stable over the next twelve months.”