Motor finance providers are less optimistic about business prospects in the year ahead.
That’s a key finding of the Finance & Leasing Association (FLA) in its latest quarterly survey.
Geraldine Kilkelly, director of research and chief economist at the FLA, said “The outlook for consumer spending has weakened with the prospect of slower wage growth and higher taxes weighing on the recovery in real household disposable incomes.
“The FLA’s Q4 2024 Industry Outlook Survey suggested that 41% of motor finance providers expected some increase in new business over the next year, compared with 76% in the Q3 2024 Survey, while a further 37% expected new business levels to remain stable,” she added.
Kilkelly’s comments came as the FLA reported that the consumer new car finance market new business by value in October 2% lower than in the same month in 2023, while new business volumes fell by 6%.
In the ten months to October 2024, new business volumes in this market were 4% lower than in the same period in 2023.
The consumer used car finance market reported a fall in the value and volume of new business in October of 1% compared with the same month in 2023.
In the ten months to October 2024, new business volumes in this market were 1% lower than in the same period in 2023.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “Our latest market data shows modest falls in new business by value and volume reported by the consumer car finance market in October across both the new and used car finance markets.
The average advance to consumers for new and used car purchases in October grew by 5% and held steady respectively, compared with the same month in 2023.
| Table 1: Cars bought on finance by consumers through the point of sale | ||||||
| New business | Oct 2024 | %
change on prev. year |
3 months to Oct 2024 |
% change on prev. year | 12 months to Oct 2024 | % change on prev. year |
| New cars | ||||||
| Value of advances (£m) | 1,347 | -2 | 4,935 | 10 | 17,392 | 2 |
| Number of cars | 47,775 | -6 | 174,806 | 4 | 622,355 | -4 |
| Used cars | ||||||
| Value of advances (£m) | 1,787 | -1 | 5,373 | -3 | 21,360 | -4 |
| Number of cars | 119,959 | -1 | 362,408 | -1 | 1,447,707 | -1 |
| Total cars | ||||||
| Value of advances (£m) | 3,135 | -1 | 10,308 | 3 | 38,751 | -1 |
| Number of cars | 167,734 | -2 | 537,214 | 0 | 2,070,062 | -2 |
| Table 2: Cars bought on finance by businesses | ||||||
| New business | Oct 2024 | %
change on prev. year |
3
months to Oct 2024 |
% change on prev. year | 12 months to Oct 2024 | % change on prev. year |
| New cars | ||||||
| Number of cars | 31,871 | -6 | 85,274 | -14 | 357,633 | -2 |
| Used cars | ||||||
| Number of cars | 4,239 | -29 | 11,941 | -23 | 58,829 | -1 |
