1:01 pm, May 8, 2025
The number of customers taking out car finance on new and used cars soared in March, new data shows.
Latest figures from the Finance and Leasing Association (FLA) reveals March experienced the strongest rate of growth in more than three years.
The FLA said a primary reason for the uplift was customers bringing forward their purchases before tax changes kicked in a month later.
Analysing the data in detail shows that consumer car finance new business volumes grew in March 2025 by 11% compared with the same month in 2024.
The corresponding value of new business grew by 18% over the same period. In Q1 2025, new business was 3% higher by volume compared with Q1 2024.
The consumer new car finance market reported new business by value in March 25% higher than in the same month in 2024, while new business volumes grew by 21%. In Q1 2025, new business volumes in this market were 16% higher than in Q1 2024.
Meanwhile, in the used car finance market, the value of new business in March was 9% higher than in the same month in 2024, while new business volumes grew by 3%. In Q1 2025, new business volumes in this market were 3% lower than in Q1 2024.
Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said: ‘March saw the consumer car finance market report its strongest rate of growth in more than three years supported by the issue of a new registration plate, consumers bringing forward new car purchases ahead of increases in vehicle excise duty from April 2025, and slightly more working days in March 2025 than in the same month in 2024 due to the timing of Easter.
‘The outlook remains uncertain with the latest indicators of consumer confidence showing a significant downturn in sentiment about economic conditions.
‘Further cuts in interest rates should help to ease some of the pressure on real household disposable incomes.’
