New car finance grew by just 1% year-on-year by both volume and value in July, according to the Finance & Leasing Association (FLA).
The 71,494 cars bought on finance and £1,171m worth of advances represented just a small amount of growth compared to the same month last year.
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While this still represented some growth, these figures continued the recent trend of car finance growth slowing down. The last three months have seen new car finance volumes grow by 5% in June, 8% in May and 12% in April.
This growth occurred in the context of falling private sales, however, and as a result POS finance penetration increased for the past 12 months increased from 84.9% in the twelve months to June up to 85.3% in the twelve months to July.
The used car sector faired only a little better. 103,554 used cars were bought on finance in July, also just 1% above the same month last year, however the value of advances increased 2%, to £1,110.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The performance of the POS consumer new and used car finance markets remains in line with our expectations for 2016 as a whole. The FLA’s Q3 2016 retail motor finance confidence survey suggests that new business levels will remain broadly stable over the next twelve months.”
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