Latest figures from the Finance & Leasing Association show the consumer car finance market suffered a 35 per cent drop in new business volumes in January 2021 versus the same month last year.
The consumer new car finance market reported a drop in new business volumes of 38 per cent compared with January 2020.
The percentage of private new car sales financed by FLA members in the 12 months to January 2021 held steady, though, at 93.2 per cent.
Meanwhile, the consumer used car finance market saw a similar fall in in January, as new business volumes decreased by 34 per cent compared with the same month in 2020.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: ‘The impact of the latest UK-wide lockdown restrictions has not been as severe as the first lockdown, with many dealerships able to offer click-and-collect or deliver services.’
She added that the value of new business in the consumer car finance market was expected to decline by 16 per cent in the first quarter.
‘Our latest research suggests that once showrooms reopen there will be a strong recovery in the consumer car finance market.’
The FLA expects the value of new business to grow by 17 per cent this year, with a further 12 per cent growth forecast for 2022.
Earlier this month, it was revealed that cash is still king when it comes to car finance.
A What Car? survey showed that 67 per cent of respondents in a poll of 1,212 said they funded their last new or used car that way.
Meanwhile, the average amount of money a car buyer spends a month on their finance payments was shown to be between £300 and £400.
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