The motor finance market reported growth in both the value and volume of new business for the first time since March during August trading, the Finance and Leasing Association (FLA) has reported.

FLA consumer car finance data showed that new business volumes grew 5% (to 173,243 units) year-on-year as the value of new business increased by 13% (to £2.99bn) to leave new business volumes 5% up year-to-date.

The used car sector was the star performer amid ongoing new vehicle supply constraints, with year-on-year growth of 19% by value (to £6.1bn) and 8% by volume (to 397,989).

New car finance market reported growth in new business of 2% by value (to £3.7bn), but a fall of 6% by volume (to 146,684) in the traditionally quiet month before the September number 'plate change period. New business volumes are now 6% down year-to-date.

Businesses funding their car purchases with finance generated a 70% increase in volumes (to 5,160 units) for the motor finance sector in August, meanwhile, as the volume of new cars funded during the month declined by 14% to 17,872.

FLA director of research and chief economist Geraldine Kilkelly said: “In August, the consumer car finance market reported growth in both the value and volume of new business for the first time since March this year, buoyed by another strong performance by the consumer used car finance market.

“Growth in average advances provided for consumer new and used car purchases remained robust despite some softening in the growth of new and used car prices.”

Kilkelly said that finance providers must be ready to support consumers as the cost-of-living crisis takes its toll on household finances this winter, however.

Echoing recent sentiment expressed by the Financial Conduct Authority (FCA), she said: “During the coming months when many consumers may be facing increased pressures on their household incomes, the motor finance industry remains committed to meeting demand for the financing of car purchases and providing targeted support to customers who may need it.

“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”