The majority of lenders are expecting growth in the new car finance market this year, according to the Finance & Leasing Association (FLA).
The FLA has published results of a new quarterly FLA Retail Motor Finance Confidence Survey which shows 83% of respondents expecting growth in the new car finance, with 35% expecting strong growth of between 10% and 20%.
The survey shows 95% of respondents expect growth in the retail used car finance market, with more than a fifth (21%) expecting growth of between 10% and 20%.
Over half of lenders (53%) also expect growth in the light commercial vehicle finance market, with almost a quarter expecting growth of more than 10%.
Respondents also highlighted a number of potential risks to the industry’s performance in the year ahead, including any weakening of the economic outlook leading to falls in business and consumer confidence.
Another concern was increased uncertainty regarding the transfer of consumer credit regulation to the new Financial Conduct Authority (FCA).
The FLA said it is working with the Government and regulators to try to ensure that the new regulatory regime for consumer credit is proportionate.
While much progress has been made, the FLA still has concerns about the timetable and transitional arrangements, and remains in close dialogue with policymakers.
Paul Harrison, head of motor finance at the FLA, said: “The survey brings together the views of leading executives and it is quite clear that they want a new regulatory regime which does not harm competitiveness or the availability of credit for consumers.
“Even though the new regulatory regime comes into force on April 1, 2014, on the Government’s current timetable the final rules will only have been published the previous month.
“A sensible transition is needed to ensure the industry and the new regulator are ready for what will be the biggest upheaval in consumer credit regulation for a generation.”