Cost of living bites as car finance dips

New figures released by the Finance & Leasing Association (FLA) show that consumer car finance new business volumes fell in February 2023 by five per cent compared with the same month in 2022.

The corresponding value of new business also fell by five per cent over the same period.

In the first two months of 2023, new business fell five per cent by value and three per cent by volume, compared with the same period in 2022.

The consumer new car finance market reported new business up three per cent by value in February compared with the same month in 2022, while new business volumes held steady; in the first two months of 2023, new business volumes in this market were six per cent lower than in the same period in 2022.

The consumer used car finance market reported a fall in new business of eight per cent by value and six per cent by volume compared with the same month in 2022. In the first two months of 2023, new business volumes in this market decreased by three per cent compared with the same period in 2022.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “While the economic outlook has improved, challenges remain for households and businesses as they deal with the impact of higher prices, taxes, and interest rates.  We expect the consumer car finance market to report a fall in new business by value of around six per cent in 2023 as a whole.