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Customer car finance market grew by 327 per cent in May, data shows

  • New business volumes for customer car finance up 327 per cent compared to May 2020
  • Consumer business volumes rise by 555 per cent
  • Industry expected to return to more normal levels once the pandemic is over

Time 3 months ago

The customer car finance market grew by an eye-watering 327 per cent in the month of May, new data has revealed.

Information recently released by the Finance & Leasing Association (FLA) found that new business volumes were almost three-and-a-half times higher than the same month in 2020. 

It marks a huge rise from the rest of the year, which is currently 37 per cent higher than the first five months of 2020.

The consumer new car finance market saw an even bigger rise with a hike of 514 per cent compared to May 2020.

The value of new business also grew by 555 per cent.

In the first five months of 2021, new business volumes in the market rose by 32 per cent against 2020.

The spectacular year-on-year rises are largely down to the Covid-19 pandemic.

Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said: ‘The recovery in the consumer car finance market continued in May as consumers have become more optimistic of a strong economic recovery. 

‘The significant growth rates reported in April and May reflect the impact on new business levels of restrictions to deal with Covid-19 during the first lockdown and we expect these to moderate in the coming months. 

‘Risks to the recovery remain from ongoing restrictions that may be needed to deal with the pandemic, the impact on confidence and unemployment once Government support schemes end, and increasing inflationary pressures.

‘Nevertheless, we currently expect the industry to return to more normal new business levels during the second half of 2021.’

Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.

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