New figures released today by the Finance & Leasing Association (FLA) show that consumer car finance new business by value and volume fell in December 2022 by 6% compared with the same month in 2021. In 2022 as a whole, new business grew 9% by value and 3% by volume compared with 2021.
The consumer new car finance market reported a fall in new business of 7% by value and 16% by volume in December compared with the same month in 2021. In 2022 as a whole, new business volumes in this market remained 7% lower than in 2021.
The consumer used car finance market reported a fall in new business of 4% by value and 1% by volume in December compared with the same month in 2021. In the 2022 as a whole, new business volumes in this market were 8% higher than in 2021.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:
“The consumer car finance market showed signs of softer demand in the final quarter of 2022. Despite the challenges faced by the industry from shortages of supply during 2022, the value of new business provided by this market reached a record level of £40.7 billion in 2022, supported by higher underlying asset values.
“While the near-term outlook remains challenging, the UK avoided recession in Q4 2022, inflationary pressures have shown signs of easing, and the labour market remains robust. The FLA’s Q1 2023 Industry Outlook Survey suggested that motor finance providers are more optimistic about the prospects for growth, with 52% expecting some increase in new business over the next year, up from 23% in Q4 2022.
“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”