New business volumes in the consumer car finance market grew by 6% year-on-year in December, and held steady in 2019 as a whole, according to the Finance and Leasing Association (FLA).
The new car finance market grew by 4% year-on-year in December, but fell by 3% in 2019 as a whole. The percentage of private new car sales financed by FLA members was 91.7% in the twelve months to December 2019.
In the used car finance market, new business volumes were up 7% year-on-year in December, while the market grew 2% in 2019 as a whole. The number of used cars bought by consumers through the point of sale totalled 146,676 in December – a 6% rise on December 2018.
The number of new cars bought on finance by businesses in the three months to December 2019 dropped 2% year-on-year to 96,865. For used vehicles bought on finance by businesses, the three months to December 2019 saw a 31% year-on-year decline to 11,009.
Geraldine Kilkelly, head of research and chief economist at the FLA, said the performance of the consumer car finance market was in line with expectations. “A similar performance of broadly stably new business volumes overall in 2020 is likely if we see a pick-up in consumer confidence.
“FLA members continued to set new records in 2019, with the penetration rate of consumer new car finance reaching 91.7%, and a record level of new business volumes of almost 1.5m cars reported by the consumer used car finance market.”
In December, Stephen Haddrill, director of the FLA, called for some legislative reform to meet the needs of the digital age.
Haddrill said: “At the FLA, we want to see some legislative reform, principally to the Consumer Credit Act (CCA). Is there scope in the government agenda for this? We believe so, but we will need to work with other stakeholders, and consumer representatives in particular.”
“We also need to show that what we’re asking for is already aligned to important key issues – for instance, financing green vehicles, which contributes to net zero emissions; strengthening investment, which would help to drive productivity especially in SMEs, and modernising analogue legislation so that it is fit for a digital age.”