Six percent drop in new car finance business in December

Broken down, the consumer new car finance market saw a fall in new business of seven percent by value and 16% by volume.  

However, in as a whole 2022, new business grew nine percent by value and three percent by volume compared with 2021. 

Looking at the consumer used car finance market, this reported a fall in new business of four percent by value and one percent by volume in December compared with the same month in 2021. In contrast, 2022 saw new business volumes in this market grow by eight percent when compared to 2021. 

Commenting on this, the FLA’s director of research and chief economist Geraldine Kilkelly said: “The consumer car finance market showed signs of softer demand in the final quarter of 2022.   

“Despite the challenges faced by the industry from shortages of supply during 2022, the value of new business provided by this market reached a record level of £40.7bn in 2022, supported by higher underlying asset values. 

“While the near-term outlook remains challenging, the UK avoided recession in the fourth quarter of 2022, inflationary pressures have shown signs of easing, and the labour market remains robust.  

“The FLA’s first quarter of 2023 Industry Outlook Survey suggested that motor finance providers are more optimistic about the prospects for growth, with 52% expecting some increase in new business over the next year, up from 23% in fourth quarter of 2022.”