New business volumes in the consumer car finance market collapsed by 94% during April compared with the same month in 2019 as lockdown restrictions halted trade, latest figures from the Finance & Leasing Association (FLA) reveal.
During the month, just 2,580 new cars were acquired using finance, a fall of 97% year-on-year. In the used car market, demand was down 92%, with just under 11,000 cars bought on finance.
Total advances were down 94% to £185 million, compared to £3.2 billion the year before.
Demand for new and used auto finance at point of sale (UK) - April 2010-2020
The percentage of private new car sales financed by FLA members was 94.5% in the 12 months to April 2020. The average amount financed on the few cars sold followed a long-term trend of growth, reaching £21,700, a new April high.
In the used car market, there was evidence of consumers focusing on cheaper models, with the average amount financed falling below £12,000 for the first time since 2018.
UK POS car finance market - average amount financed
With dealers able to open their doors again in June, early reports indicate strong demand, especially where there is a strong online sales offering to enhance the car sales offering.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “While the motor finance market has been the hardest hit of FLA markets, the industry has been innovative in its use of click and collect during the lockdown.
“With the welcome opening of showrooms from the beginning of June, the motor finance market is ready to meet the demand for new finance from households and businesses.
“The FLA calls on the Government and Bank of England to take immediate action to open up financial support schemes to all lenders, including non-banks, so that they can meet this pent-up demand for finance and the huge ongoing requests for forbearance.”
Cars bought on finance by consumers through the point of sale
|New business||Apr 2020||% change on prev. year||3 months to Apr 2020||% change on prev. year||12 months to Apr 2020||% change on prev. year|
|Value of advances (£m)||56||-97||3,465||-41||17,156||-12|
|Number of cars||2,580||-97||161,597||-44||802,053||-16|
|Value of advances (£m)||129||-92||2,984||-37||16,625||-7|
|Number of cars||10,919||-92||236,235||-39||1,335,113||-9|
|Value of advances (£m)||185||-94||6,449||-39||33,782||-10|
|Number of cars||13,499||-94||397,832||-41||2,137,166||-12|