The growth in UK car finance outstripped that of new car registrations once more in June, as the number of new vehicles financed grew 9% year-on-year to a total of 72,726 cars, according to the latest figures from the Finance & Leasing Association (FLA). In comparison total new car registrations increased 6.2% in the same period
In addition the penetration rates across the motor finance industry grew again to 75.2%, from 75% in May, taking it to just below the record level of 75.3%.
In terms of the value of cars financed, the difference from 2013 was stark. The market rose 13% to a value of £1.1bn in June compared to the year before. This was in line with growth from prestige car makers such as BMW, Mercedes and Audi, which added an average of over 10% in sales for June.
Quarterly growth in finance therefore maintained its strength into the second quarter of 2014 compared to the same period the year before. The number of new cars financed in the period exceeded 210,000, up 7% year-on-year. The value of those cars financed was up 13% to a total £3.3bn.
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Used Cars
Finance for used cars grew at an even faster rate than for new in June as finance companies tapped into the opportunities rising values in the used market offered.
In June the value of the used car finance markets grew 28% year-on-year to £909m, with a total of 90,367 vehicles financed (up 22%).
In the second quarter of 2014 used vehicle finance from FLA members totalled £2.7bn, a rise of 21% on the year before, with a 14% rise in the number of vehicles financed to a total of just under 270,000 cars for the quarter. This total was more than was financed in the new car markets (211,179) for the same period.
With the June rise in used car finance, FLA members for the 12 months up to the end of June had financed just under one million vehicles.
Geraldine Kilkelly, head of statistics and chief economist at the FLA said: "The first half of 2014 has seen strong performances in both the consumer new and used car finance sectors. The last six months have also seen the FLA’s penetration rate maintained at around three quarters of all private new car sales in the UK which shows how popular point-of-sale credit is with new car buyers."
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