New car finance volumes dropped by 3% in October year-on-year, according to the latest figures from the Finance and Leasing Association (FLA).
The corresponding value of new business was 2% lower over the same period. In the 10 months to October 2023, new business volumes remained 6% lower than in the same period in 2022.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The consumer car finance market remains remarkably resilient despite the subdued economic outlook, with the value of new business expected to be only 4% lower in 2023 than in 2022.
“FLA’s latest research also suggests that the value of consumer car finance new business in 2024 is expected to grow by 2% to £40.1 billion.”
The FLA is predicting the value of new business provided to consumers for new car purchases to grow by 9% in 2024 to £18.9bn, while consumer used car finance new business by value is expected to fall by 4% in 2024 to £21.2bn.
Kilkelly added: “As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”
The latest FLA data showed consumer new car finance reported new business up 1% by value but 2% lower by volume in October compared with the same month in 2022. In the 10 months to October 2023, new business volumes in this market remained 5% lower than in the same period in 2022.
The consumer used car finance market also reported a fall in new business in October of 5% by value and 4% by volume compared with the same month in 2022. Year-to-date up to October 2023, new business volumes in this market were 6% lower than in the same period in 2022.
Mark Attwell, director at AA Car Finance, said: “Although new registration plates fuelled an uplift in car finance volumes in September, the momentum unfortunately did not last into the following month.
“While car finance figures are down compared to last year, new and used car sales continue to rise, which could signal that more people are choosing to buy outright.
“Car manufacturing is also on the rise, with a 31.6% surge in new vehicles produced in October. This speedy production turnaround is getting drivers behind the wheel faster, and could help to boost finance volumes in the new year.
“An increase in consumer confidence now interest rates are more steady and inflation is expected to fall should also help to boost finance-backed car purchases in the new year.”
