In May, 64,275 new cars were sold to retail buyers with dealer loans – a 27% year-on-year increase, says the Finance & Leasing Association. The value of advances rose 30% to £955 million in the sector’s 17th consecutive month of double-digit growth.
However, the volume of new and used cars bought by businesses with showroom loans fell by 18% caused, says the FLA, by a particularly strong market May 2012.
Members’ penetration of the new car retail market in May increased to a record 73.5%, prompting FLA head of motor finance Paul Harrison to again warn lenders to prepare for 2014’s new regulatory regime.
“We are only nine months away from the start of the new regulatory regime for consumer credit and it is vital the industry plans ahead.”
£10.582bn annual total
In the three months to May the value of FLA advances through dealers increased by 30% to £3.827 billion on 257,433 cars (up 25% year-on-year). Loans totalled £10.582bn (34% up) in the 12 months to May on 730,577 units (28% higher).
Sales of used cars to consumers with showroom loans also moved ahead. In May, advances totalled £756m (18% ahead) on 80,366 cars and the three-month figures were £2.201bn (up 15%) and 234,904 cars (a 12% improvement). In the year to May loans of £7.685bn were 10% higher, with units 8% up at 821,610.
Dealers provided loans for 34,579 new cars acquired by businesses in May, down 18% from a year earlier, partly due to a particularly strong market in May 2012. The three-month total of 114,066 was 8% lower and the 12-month tally of 389,666 showed a drop of 3%.
Showroom financed sales of used cars to businesses did worse year-on-year in May: the total of 3,626 was 40% lower.