Kilkelly geraldine 400

New business in the UK asset finance and auto finance markets fell more than one quarter in March as the Coronavirus lockdown began, according to new figures from the Finance & Leasing Association (FLA).

Total asset finance new business (primarily leasing and hire purchase) fell by 28% during the month, compared to March 2019, pulling the market down 15% for the first quarter of the year, compared with the same period last year.

IT equipment finance was the only asset sector to report growth in March, with new business up by 15% compared with the same month in 2019 as digital solutions became a priority for UK businesses.

Over the same period, the commercial vehicle finance and plant and machinery finance sectors reported falls in new business of 32% and 23% respectively.

Geraldine Kilkelly (pictured), head of research and chief economist at the FLA, said: “The asset finance market was hit hard in March by measures taken by the Government to deal with the coronavirus crisis. Of particular concern is new lending to SMEs, which contracted by 19% compared with March 2019, and by 10% in Q1 2020 as a whole.

“FLA asset finance members provided £20.1 billion of new lending to SMEs in 2019, of which £7 billion came from non-bank lenders. We continue to urge the Government to provide support for non-bank lenders by allowing them to access the Term Funding Scheme. This would ensure that a diverse, innovative and competitive business lending market remains in place to help the economic recovery.”

The lockdown came at the end of March, which reduced the impact on the new car market during a critical month when the introduction of a new registration plate boosts sales. Overall, the number of vehicles financed fell by 29% and the value of advances dropped by around one quarter year-on-year.

Overall, 114,270 new cars were bought on finance at the point of sale during March.

The percentage of private new car sales financed by FLA members reached a record-high of 95.6% in the 12 months to March 2020.

Used car finance was also down around one quarter in March compared with the same period last year.

The FLA predicts that the consumer car finance market is likely fall 29% in 2020 as a whole.

Asset Finance New Business March 2020

 

 

March 2020

% change on

prev. year

3 months to Mar
2020

% change on

prev. year

12 months to Mar
2020

% change on

prev. year

Total FLA asset finance (£m)  2,793 -28 7,562 -15 34,332 -1
Total excluding high value (£m) 2,684 -25 7,141 -14 31,895 -1
Data Extracts:       
By asset:
Plant and machinery finance (£m) 575  -23 1,583 -17 6,988 -3
Commercial vehicle finance (£m)  705 -32 1,916 -18 8,732 -1
IT equipment finance (£m)  242 -15 673 10 2,891 3
Business equipment finance (£m) 184 -19  518  -11  2,358  -5
Car finance (£m) 832  -26  2,068  -17  9,609  -2
Aircraft, ships and rolling stock finance (£m) 27  -75  115  -21  535  39
By channel:
Direct finance (£m)   1,286  -31  3,449  -19  15,898  -2 
Broker-introduced finance (£m)  507  -25  1,520  -10  6,621 
Sales finance (£m) 891 -16 2,172 -7 9,376 -1
By product:
Finance leasing (£m)  336  -31 924 -18 4,168 -6
Operating leasing (£m) 572  -23  1,517  -10  6,810  -1 
Lease/Hire purchase (£m)   1,507  -26  4,023  -16  18,513  -2 
Other finance (£m)  276  -37  854  -11  3,480 

Cars bought on finance by consumers through the point of sale 

New businessMar 2020 

% change on

prev. year

3 months to

Mar 2020

% change on

prev. year

12 months to

Mar 2020

% change on

prev. year

New cars
Value of advances (£m) 2,498  -24  4,641  -17  18,711  -4 
Number of cars 114,270  -29  217,684  -21  875,797  -9 
Used cars 
Value of advances (£m) 1,252  -23  4,512  -5  18,129 
Number of cars 99,786  -24  357,182  -8 1,458,273  -1 
Total cars
Value of advances (£m) 3,750  -24  9,153  -11  36,840  -1 
Number of cars 214,056  -27  574,866  -13  2,334,070  -1 

 

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