New business volumes in the consumer car finance market fell by 78% year-on-year in May, and by 41% in the five months to May 2020.
The new car finance market saw an 86% year-on-year decline in May to 10,776 cars, and a 46% fall in the five months leading to May. The percentage of private new car sales financed by FLA members was 94.3% in the 12 months to May. The value of advances in the new car sector fell 85% year-on-year to £241m.
In the used car finance market, the FLA reported a 73% decline in new business volumes to 35,066 cars when compared with the same month in 2019. The value of advances in the used car market fell 72% year-on-year to £439m.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The FLA’s latest figures suggest that while the motor finance industry continued to be severely impacted by the lockdown restrictions in May, new business volumes improved on the record low in April as the industry embraced the use of click and collect to meet customer demand.
“As the industry gears up to meet an extended period of forbearance and a strong pick-up in demand for new credit, the Government and Bank of England need to ensure that all lenders, including non-banks, have access to financial support schemes. This is vital if households and businesses are to be served by a competitive and vibrant motor finance industry post-crisis.”