New and used car finance grew in both value and volume in July, new figures from the Finance and Leasing Association (FLA) reveal.
New business volumes returned to normal levels during the month, but the FLA has warned of the possibility of a sustained recovery.
Data shows business in the consumer car finance market grew 19 per cent by value and nine per cent by volume in July 2020 compared with the same month in 2019.
In the seven months to July 2020, new business volumes in this market remained 30 per cent lower than in the same period in 2019, however.
The consumer new car finance market reported growth in new business of 20 per cent by value and nine per cent by volume in July, and in the first seven months of 2020 were down by 36 per cent.
The FLAs said the percentage of private new car sales financed by its members in the twelve months to July 2020 was 93.5 per cent, up from 91.6 per cent in the same period last year.
Meanwhile, for used cars, new business grew of 18 per cent in value and nine per cent by volume. In the first seven months of 2020, new business volumes in this market fell by 26 per cent compared with the same period in 2019.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: ‘The pick-up in the economy since June has been encouraging, but the sustainability of the recovery remains in doubt.
‘Our latest research suggests that new business in the consumer car finance market is likely to fall by 20 per cent in 2020 as a whole.
‘We continue to urge the government and Bank of England to ensure that there is adequate support for all lenders so that they can meet the ongoing demand from customers for forbearance and at the same time meet demand for new credit during what will be a difficult period for the economy.’