July 14, 2024

FLA Reports 4% Decline in Consumer Car Finance in May 2024

The consumer car finance market saw a 4% decline in new business in May 2024 compared to the same month in 2023, as reported by the Finance & Leasing Association (FLA).

From January to May 2024, the new business volume and value were 2% and 1% lower, respectively, compared to the same period in 2023.

In May, the consumer new car finance market experienced a 6% increase in new business value compared to May 2023, while new business volumes decreased by 2%. Over the first five months of 2024, new business volumes in this market were 5% lower than the same period in 2023.

On the other hand, the consumer used car finance market reported a 10% decrease in new business value in May 2024 compared to May 2023, with new business volumes dropping by 5%. However, the new business volumes in this market remained stable from January to May 2024 compared to 2023.

Geraldine Kilkelly, the Director of Research and Chief Economist at the FLA, mentioned, “The point-of-sale (POS) consumer car finance market has seen only a slight fall in new business volumes in 2024 so far. The finance penetration of the private new BEVs market has continued to improve, with the most popular method being via a salary sacrifice scheme.”

She further added, “Our latest research indicates that the POS consumer car finance market is expected to maintain steady new business value of around £39 billion in 2024, supported by growing consumer confidence, rising real earnings, and the possibility of lower interest rates.”

For customers facing payment concerns, Kilkelly advised, “Customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”

FLA: Consumer car finance new business volumes grew by 1% in February 2024

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