Dealers can expect a ‘challenging’ year for motor finance in 2025, according to the latest forecast from the Finance & Leasing Association (FLA).
Last year motor finance business reached £38.9bn, a similar amount to 2023 but this year could be different with 60% of finance houses not expecting an increase in sales for the year.
“The outlook for 2025 remains challenging. Despite the lower inflation and interest rate environment, continued pressure on real disposable incomes has hit consumer confidence and consumer spending,” said FLA head of research and chief economist Geraldine Kilkelly
“FLA’s latest industry outlook survey suggested that over 40% of motor finance respondents expected some increase in new business over the next year,” she added.
Kilkelly’s comments came as the FLA released the latest motor finance sales figures, for November.
The consumer new car finance market reported new business by value in November 12% higher than in the same month in 2023, while new business volumes grew by 6%.
In the eleven months to November 2024, new business volumes in this market were 3% lower than in the same period in 2023.
The consumer used car finance market reported a fall in the value of new business in November of 2% compared with the same month in 2023, while new business volumes decreased by 5%. In the eleven months to November 2024, new business volumes in this market were 1% lower than in the same period in 2023.
