Consumer car finance growth of 327% by volume and 385% by value in May brought more evidence to back-up the Finance and Leasing Association’s (FLA) prediction of a “strong rebound” for the sector.
New car registrations funded by FLA members rose by 514% to 65,635 year-on-year as the value of advances rose by 555% to £1.58 billion as the volume of funded used car sales rose by 270% to 130,899 with a value up 293% at £1.75bn during May, FLA data showed.
In the first five months of 2021, new business volumes in this market were 39% higher than in the same period in 2020, the FLA said.
The percentage of private new car sales financed by FLA members in the twelve months to May 2021 was 92.9%.
Geraldine Kilkelly, the FLA's director of research and chief economist, said: “The recovery in the consumer car finance market continued in May as consumers have become more optimistic of a strong economic recovery.
“The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with COVID-19 during the first lockdown and we expect these to moderate in the coming months.
“Risks to the recovery remain from ongoing restrictions that may be needed to deal with the pandemic, the impact on confidence and unemployment once Government support schemes end, and increasing inflationary pressures.
“Nevertheless, we currently expect the industry to return to more normal new business levels during the second half of 2021.”
Last month AM reported on an FLA forecast that the consumer car finance market is expected to grow by 19% in 2021 and 22% in 22% following resurgent April trading.
The FLA’s May consumer finance data was published this morning as the Society of Motor Manufacturers and Traders (SMMT) revealed new car registrations data showing the UK had generated 186,128 new cars registrations in June.
The figure was up 28% year-on-year but down 16.4% on the month’s 10-year average.