The consumer car finance market saw a 3% year-on-year decline in new business volumes in October, according to the latest data from the Finance and Leasing Association (FLA).

The consumer new car finance market reported a fall in new business volumes of 4% in October, when compared with the same month in 2019. In the 10 months to October 2020, new business volumes in this market fell by 25% compared with the same period in the previous year.

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The percentage of private new car sales financed by FLA members in the twelve months to October 2020 was 94.1%, up from 91.7% in the same period in 2019.

The consumer used car finance market reported a fall in new business volumes of 2% in October 2020 compared with the same month in 2019. In the ten months to October 2020, new business volumes in this market fell by 17% compared with the same period in the previous year.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The introduction of new restrictions during October to curb the growth in coronavirus cases has led to a softening in demand for consumer car finance.  The fall in the used car finance market in October was the first since May of this year.

“The economic outlook has improved following the promised rollout of a vaccine before Christmas. Based on this more positive outlook, our latest research suggests that consumer car finance new business by value is likely to grow by 18% in 2021, following a contraction of 20% in 2020 as whole.”

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The decline follows a positive month in September, when the market saw year-on-year growth of 7%. The consumer new car finance market reported new business volumes up by 5% in September 2020 compared with the same month in 2019. In the nine months to September 2020, new business volumes in this market fell by 27% compared with the same period in the previous yea