The consumer car finance market suffered a 21 per cent fall in new business volumes in September 2021 versus the same month in 2020, figures out today (Nov 5) reveal.
However, said the Finance & Leasing Association (FLA), new business volumes were nine per cent HIGHER in the nine months to September 2021 than during the same period last year.
Breaking it down, the consumer new car finance market reported a 25 per cent fall in new business by value and 27 per cent by volume in September compared with September 2020.
In the nine months to September 2021, new business volumes in the consumer new car finance market were six per cent higher than for 2020.
The percentage of private new car sales financed by FLA members in the 12 months to September 2021 was 93.8 per cent – up by half a percentage point from 93.3 per cent in August.
The consumer used car finance market fared far better, with a fall in new business of four per cent by value and 15 per cent by volume during September versus the same month in 2020.
Over the nine months to September 2021, new business volumes in this market stayed 11 per cent higher than during the same period in 2020.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: ‘Supply chain issues have been particularly acute in the car market, which is reflected in the 17 per cent fall in new business volumes reported by the consumer car finance market in Q3 2021.
‘Motor finance providers expect constraints on new car supply to ease sooner than those in the used car market.
‘The supply issues in the new car market have primarily been driven by the lack of semiconductors, while the knock-on effects from new car shortages combined with high demand have hit used car supply.’
She added: ‘Despite the risks to the economic and market recovery from supply chain disruption, higher inflation and further waves of Covid-19, our latest research suggests that the industry has maintained its optimism about the opportunities for growth.
‘The FLA’s Q4 2021 industry outlook survey shows that 88 per cent of motor finance providers expected new business growth over the next 12 months.’