UK’s consumer car finance new business volumes recorded a decline in March 2024, according to the latest data from the Finance & Leasing Association (FLA).
New business volumes decreased by 7% during the month, compared with the same month of the previous year.
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In addition, the value of new business fell 5% during the same period.
The first quarter of 2024 also reflected an overall downward trend in new business, with a 3% drop in value and a 4% fall in volume when compared with the first quarter of 2023.
Despite the overall downturn, the consumer new car finance market showed some resilience in new business in terms of value, with a 2% increase in March 2024 compared with the same month in the previous year.
However, new business volumes in this segment did not fare as well, logging a 5% decrease.
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By GlobalDataThe first quarter of the year highlighted more challenges, with new business volumes down by 8% in the segment compared with the first quarter of 2023.
The consumer used car finance market faced even steeper declines.
In March 2024, the value of new business in this market dropped by 12% compared to March 2023 while the volume of new business shrunk by 8%.
In the first quarter of 2024, new business volumes in this market dipped 2% from the same period last year.
FLA director of research and chief economist Geraldine Kilkelly said: “The performance of the consumer new car finance market in the first quarter of 2024 was in line with trends in private new car registrations which fell by 9%. The percentage of these sales financed by FLA members has increased in recent months to 78.9% in the twelve months to March 2024.
“The rebound in the economy demonstrated by the latest official data was reflected in the FLA’s Q2 2024 Industry Outlook Survey which showed 80% of motor finance respondents expected some improvement in economic conditions over the next 12 months. Over the same period, more than three-quarters of respondents anticipated some increase in the value of new business.”
Responding to the FLA’s data, AA Car Finance director Mark Attwell said: “The car finance sector might have experienced a turbulent beginning to the year, but we anticipate this volatility to settle as we move further into 2024 and economic stability returns.
“Enquiries for car finance have been picking up nicely this spring, and, as the strain on personal finances continues to ease, it will once again become a viable option for a broader range of customers to buy their ideal vehicle. “
Recent data released by the Society of Motor Manufacturers and Traders (SMMT) unveiled that the number of cars built in the UK decreased by 27% in March from the prior year.
