Most car finance firms expect some upturn in business over the next year despite the current ‘subdued’ consumer confidence.
That’s a key finding of the Finance & Leasing Association’s industry outlook for the second quarter of 2025.
“The FLA’s Q2 2025 industry outlook survey results showed that three-quarters of motor finance respondents expected some increase in new business over the next year despite subdued consumer and business confidence,” said Geraldine Kilkelly, director of research and chief economist at the FLA.
“The prospect of further cuts in interest rates, strong consumer savings, and the potential for growth as the UK transitions to greener assets should contribute to single-digit new business growth by value over the next 12 months.”
Kilkelly was speaking at the FLA released figures showing the consumer new car finance market reported new business by value in April 7% lower than in the same month in 2024, while new business volumes fell by 8%.
In the first four months of 2025, new business volumes in this market were 11% higher than in the same period in 2024.
The consumer used car finance market reported the value of new business in April 4% lower than in the same month in 2024, while new business volumes grew by 2%. In the first four months of 2025, new business volumes in this market were 3% lower than in the same period in 2024.
“April saw the consumer car finance market report its first fall in new business since October 2024 as higher vehicle excise duties took effect, and consumer spending power was hit by higher energy, telephone and water bills,” said Kilkelly.
