Number of new cars bought on finance in 2017 falls seven per cent

Number of new cars bought on finance in 2017 falls seven per cent

Consumer car finance figures stayed level in 2017, with new car volumes falling while used car volumes grew.

Figures out today from the Finance and Leasing Association (FLA) show that in 2017 a total of 2.35 million cars were bought on finance. In the new market, 990,029 cars were bought on finance, down seven per cent. Meanwhile in the used car market, the numbers of cars bought on finance grew by six per cent to 1.36 million cars.

New business in December 2017 fell two per cent by value and five per cent by volume compared with the same month in 2016 to 54,589 cars.

The point of sale (POS) consumer new car finance market reported new business down nine per cent by value and 15 per cent by volume in December compared with the same month in 2016. In 2017 as a whole, new business increased two per cent by value and fell seven per cent by volume.

The percentage of private new car sales financed by FLA members through the POS stayed almost level, with 88.1 per cent seen in 2017 compared with 88.2 per cent in 2016.

The POS consumer used car finance market reported new business growth in December of eight per cent by value and three per cent by volume. In 2017 as a whole, new business grew 12 per cent by value and 6 per cent by volume.

Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: ‘New business volumes in the POS consumer car finance market reached 2.3 million in 2017 – a similar level to 2016. The market expects broadly stable new business volumes in 2018.

‘Trends in the new car finance market in the first half of 2018 are likely to be affected by the pattern of demand over the same period last year, when car purchases were brought forward into the first quarter prior to vehicle excise duty changes introduced in April.’

Tim Smith, head of motor finance at Black Horse, added: ‘These figures for finance volumes reflect a new car market correcting to a more sustainable position after record highs in early 2017 and a used car market showing consistent growth.

‘A tougher new car market often results in more low mileage, nearly new stock with attractive offers for consumers. This type of stock profile works well with PCP plans, offering customers access to newer, cleaner vehicles so it’s no surprise we continue to see an increase in demand for PCP for used cars. We expect this trend to continue and the used car market to remain robust this year.’

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