cars

The value of advances for point-of-sale car finance grew 10% year-on-year in June compared to the same month in 2017, according to new figures released by the Finance & Leasing Association (FLA).

While sales of new cars to consumers grew by 1% in June, compared to the same month in 2017, the value of new business was up by 9%.

The percentage of private new car sales financed by FLA members through the POS was 89.5% in the 12 months to June.

In the POS consumer used car finance market, new business was up 4% by volume and 11% by value, compared to the same month in 2017.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The point of sale consumer car finance market reported new business volumes up in the first half of 2018 by 4% compared with the same period in 2017.

“This was in line with expectations, with a modest fall in consumer new car finance volumes offset by single-digit new business growth in the consumer used car finance market.”

The growth is the latest in a long-term rise in the size of the UK car finance market, with the used car sector showing particularly strong growth.

In June, the average amount financed for used cars reached a new high of £12,177, while the average level of finance for new cars remained over the £20,000 level that was reached for the first time last month.

Demand for new and used cars has grown around 200% since 2010 as the market recovered from the global recession, but the volume of car finance has risen around 300% as consumers increasingly favour finance options over outright purchase, with a growing focus on more expensive SUVs and premium vehicles.

 Cars bought on finance by consumers through dealerships

New businessJune 2018

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3 mths to

June 18

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12 mths to

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New cars
Value of advances (£m) 1,717  +9 4,962 +18 19,479 +4
Number of cars 83,470 +1 243,495 +12 978,713 -6
Used cars
Value of advances (£m) 1,460 +11 4,562 +16 16,528 +13
Number of cars 119,903 +4 383,302 +10 1,412,991 +7
Total cars
Value of advances (£m) 3,176 +10 9,524 +17 36,007 +8
Number of cars 203,373 +3 626,797 +11 2,391,704 +2

Growth in UK POS consumer car finance June 2010-2018

pos consumer finance