New figures released today by the Finance & Leasing Association (FLA) show that new business volumes in the consumer car finance market grew by 9% year-on-year to almost 2.1 million cars financed in 2021.
In 2021 overall, new business volumes in this market were 6% higher than in 2020, but remained 21% lower than in 2019. The percentage of private new car sales financed by FLA members in 2021 was 91.8%, in line with pre-pandemic levels.
The consumer used car finance market reported new business volumes were 10% higher than in 2020, but remained 9% lower than in 2019.
|Table 1: Cars bought on finance by consumers |
through the point of sale 2021
|12 months to Dec 2021||% change on prev. year|
|Value of advances (£m)||17,502||13|
|Number of cars||737,053||6|
|Value of advances (£m)||19,220||19|
|Number of cars||1,361,878||10|
|Value of advances (£m)||36,722||16|
|Number of cars||2,098,931||9|
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The consumer car finance market rebounded in 2021, but the pace of recovery was hampered by increased economic uncertainty as new waves and variants of Covid-19 emerged, and the global shortage of semiconductors hit vehicle supply.
“Economic and market conditions will remain challenging this year as many households face a significant squeeze on disposable incomes from higher inflation, interest rates and taxes. However, supply issues are expected to ease and business investment is expected to recover as the year progresses. The FLA’s Q1 2022 industry outlook survey shows that 92% of motor finance providers expect new business growth over the next twelve months.”
In 2021, FLA members provided £132 billion of new finance to UK businesses and households. £101 billion of this was in the form of consumer credit, over a third of total new consumer credit written in the UK in 2021. £45 billion of it supported the purchase of new and used cars, including almost 92% of private new car registrations.