Car finance market tapers off

New figures released by the Finance & Leasing Association (FLA) show that consumer car finance new business volumes fell in April 2022 by one per cent compared with the same month in 2021.

The corresponding value of new business grew by 12% over the same period.

In the first four months of 2022, new business volumes were 15% higher than in the same period in 2021.

The consumer new car finance market reported new business up four per cent by value and one per cent by volume in April compared with the same month in 2021. In the first four months of 2022, new business volumes in this market were five per cent higher than in the same period in 2021.

The consumer used car finance market reported new business up 17% by value, but two per cent lower by volume in April compared with the same month in 2021. In the first four months of 2022, new business volumes in this market were 20% higher than in the same period in 2021.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The consumer car finance market continues to be impacted by the global disruption to the supply of vehicles. The market reported further double-digit growth in the value of new business reflecting upward pressure on car prices, particularly in the used car market.

“Consumer spending is expected to slow as pressure builds on household incomes from higher inflation, interest rates, and taxes.  Our latest research suggests that consumer car finance new business by value will grow by 11% in the first half of 2022 and by five per cent in the second half of the year.

“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”