New figures released today by the Finance & Leasing Association (FLA) show that consumer car finance new business fell 11% by both value and volume in August 2023 compared with the same month in 2022. In the first eight months of 2023, new business was 6% lower by both value and volume compared with the same period in 2022.

The consumer new car finance market reported a fall in new business of 7% by value and 12% by volume in August compared with the same month in 2022.  In the first eight months of 2023, new business volumes in this market were 7% lower than in the same period in 2022.

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The consumer used car finance market reported a fall in new business in August of 13% by value and 11% by volume compared with the same month in 2022.  In the first eight months of 2023, new business volumes in this market were 6% lower than in the same period in 2022.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:

“The lower level of new business reported by the consumer car finance market reflects in part the higher interest rate environment. Consumers also remain cautious about committing to major purchases despite some improvement in confidence as real earnings start to grow again.

“FLA motor finance providers remain positive about future growth prospects with almost three-quarters of respondents to the Q3 2023 Industry Outlook Survey expecting some increase in new business over the next twelve months.  This optimism is based on the performance of the wider market including fleet and business which continues to show robust growth in the new car finance market.

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