Car finance makes strong start to 2022

New figures released by the Finance & Leasing Association (FLA) show that the consumer car finance market reported new business volumes up in January 2022 by 43% compared with the same month in 2021.

The corresponding value of new business increased by 60% over the same period.

In the 12 months to January 2022, new business volumes grew by 15% compared with the same period in 2021.

The consumer new car finance market reported new business up 52% by value and 47% by volume in January compared with the same month in 2021, while in the 12 months to January 2022, new business volumes in this market were 12% higher than in the same period in 2021.

The percentage of private new car sales financed by FLA members in the 12 months to January 2022 was 91.2%.

The consumer used car finance market reported new business up 66% by value and 41% by volume in January compared with the same month in 2021.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The strong performance of the consumer car finance market in January in part reflects the closure of showrooms during the third UK lockdown last year and the continued record-high growth in used car prices. Annual new business by value reported by the consumer car finance market was only 1% lower in January than its pre-pandemic level.

“The economic outlook in the UK and globally has weakened following the invasion of Ukraine, with consumer price inflation in the UK expected to peak at more than 8% in the first half of this year. Nevertheless, we continue to expect further growth in the market during 2022 as demand for finance for electric vehicles and used cars remains strong.”