Car finance market endures October dip

The consumer car finance market fell in new business volumes by three per cent in October 2020 compared with the same month in 2019.

In the 10 months to October 2020, new business volumes in this market were 20% lower than in the same period in 2019.

This is according to figures released by the Finance & Leasing Association (FLA), which reported that the consumer new car finance market fell in new business volumes by four per cent in October 2020 compared with the same month in 2019, while in the 10 months to October 2020 new business volumes in this market fell by 25% compared with the same period in the previous year.

Meanwhile, the consumer used car finance market reported a fall in new business volumes of two per cent in October 2020 compared with the same month in 2019, and 17% in the 10 months to October 2020.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The introduction of new restrictions during October to curb the growth in coronavirus cases has led to a softening in demand for consumer car finance.  The fall in the used car finance market in October was the first since May of this year.

“The economic outlook has improved following the promised rollout of a vaccine before Christmas. Based on this more positive outlook, our latest research suggests that consumer car finance new business by value is likely to grow by 18% in 2021, following a contraction of 20% in 2020 as whole.”