The Finance & Leasing Association (FLA) expects year-on-year increases in loans from its members for retail purchases of new and used cars through dealerships to continue until the end of the year.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “August was a quieter month for the consumer motor finance market ahead of the new number plate in September.”
The number of new cars financed through dealerships by FLA members grew by 7% during August and the percentage of the market held steady at 75.2% in the 12 months to August. The consumer used car finance market also grew by 7% in August, but that was its slowest rate of growth this year.
In August, 43,726 new cars were bought on dealer loans worth £661 million (9% higher than a year earlier). In the three months to August, advances totalled £2.815 billion, a year-on-year rise of 12%, on 179,140 cars (up 7%). The 12-month figures reflected the strong revival in the market: loans were 20% up at £13.402bn, financing 864,535 cars (14% ahead).
The used car market lagged behind the rise in sales of financed new cars for a while, but the latest data shows increases over all timescales. In August, advances were 13% higher at £858m on 85,314 new cars (a 7% year-on-year gain). Over the three months to August, loans were 20% up at £2.703bn on 268,299 cars (14% ahead). The 12-month figures showed the strongest gains: advances totalling £10.156bn were 25% better, on 1,016,415 cars (an 18% improvement).
There were also increases in the market for dealer-financed cars bought by businesses in August: the volume of 33,328 new cars was 30% ahead of August 2013. The three-month figure was up 19% to 114,987 and over 12 months up 10% to 436,700 cars.
Businesses bought 2,863 dealer-financed used cars in August – up 22% year-on-year – but there were declines over the three months (by 29% to 9,800 cars) and by 34% to 42,854 over the 12 months.