Demand for new car finance falls, consumer confidence weakens

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The consumer new car finance market reported a fall in new business of 6% by value and 13% by volume in September compared with the same month in 2021.

In the first nine months of 2022, new business volumes in this market were 7% lower than in the same period in 2021.

The consumer used car finance market reported new business up 7% by value and 1% by volume in September compared with the same month in 2021.

In the first nine months of 2022, new business volumes in this market remained 10% higher than in the same period in 2021.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The latest figures show that disruption to the supply of new cars continued to weigh on the consumer new car finance market which reported its lowest September new business volumes since 2010.

“The consumer used car finance market saw further new business growth, but at a slower rate than in recent months.

“Consumer confidence about the outlook for their personal financial situations has weakened as the impact of higher inflation and interest rates have squeezed real household incomes.

The FLA’s Q4 2022 Industry Outlook Survey showed mixed expectations for growth over the next year among motor finance providers, with 24% expecting some increase in new business, 28% anticipating new business to remain stable, and 48% expecting some decrease.

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

 

Table 1: Cars bought on finance by consumers through the point of sale
New business Sep 2022 %

change on prev. year

3
months to Sep 2022
% change on prev. year 12 months to Sep 2022 % change on prev. year
New cars            
Value of advances (£m) 2,076 -6 4,338 -4 17,331 1
Number of cars 82,831 -13 172,460 -12 698,806 -4
Used cars            
Value of advances (£m) 1,989 7 6,113 14 23,450 24
Number of cars 127,843 1 397,850 5 1,527,391 9
Total cars            
Value of advances (£m) 4,065 0 10,452 6 40,781 13
Number of cars 210,674 -5 570,310 -1 2,226,197 5
             
             
Table 2: Cars bought on finance by businesses
New business Sep 2022 %

change on prev.

year

3

months to Sep

2022

% change on prev. year 12 months to Sep 2022 % change on prev. year
New cars            
Number of cars 25,555 -10 64,222 -14 266,572 -14
Used cars            
Number of cars 5,280 29 18,339 67 79,072 57

 





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