Car finance market enjoys May boom

The consumer car finance market swelled an incredible 327% in May compared to the same month in 2020.

This is according to figures released by the Finance & Leasing Association (FLA).

It found the consumer new car finance market reported new business volumes up by 514%, while the consumer used car finance market was up by 270%.

In the first five months of 2021, new business volumes in this market were 39% higher than in the same period in 2020.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The recovery in the consumer car finance market continued in May as consumers have become more optimistic of a strong economic recovery. The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with Covid-19 during the first lockdown and we expect these to moderate in the coming months.

“Risks to the recovery remain from ongoing restrictions that may be needed to deal with the pandemic, the impact on confidence and unemployment once government support schemes end, and increasing inflationary pressures. Nevertheless, we currently expect the industry to return to more normal new business levels during the second half of 2021.”