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The value cars sold on finance to consumers is set to fall 6% in 2023 according to the Finance & Leasing Association (FLA).
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “While the economic outlook has improved, challenges remain for households and businesses as they deal with the impact of higher prices, taxes, and interest rates. We expect the consumer car finance market to report a fall in new business by value of around 6% in 2023 as a whole.”
Kilkelly’s comments came as the FLA released figures which showed the consumer new car finance market reported new business up 3% by value in February compared with the same month in 2022, while new business volumes held steady.
In the first two months of 2023, new business volumes in this market were 6% lower than in the same period in 2022.
The consumer used car finance market reported a fall in new business of 8% by value and 6% by volume compared with the same month in 2022.
In the first two months of 2023, new business volumes in this market decreased by 3% compared with the same period in 2022.
| Table 1: Cars bought on finance by consumers through the point of sale | ||||||
| New business | Feb 2023 | %
change on prev. year |
3 months to Feb 2023 |
% change on prev. year | 12 months to Feb 2023 | % change on prev. year |
| New cars | ||||||
| Value of advances (£m) | 789 | 3 | 3,156 | -4 | 17,228 | -4 |
| Number of cars | 31,939 | 0 | 121,837 | -10 | 679,280 | -10 |
| Used cars | ||||||
| Value of advances (£m) | 1,833 | -8 | 5,084 | -5 | 23,464 | 9 |
| Number of cars | 122,649 | -6 | 345,264 | -2 | 1,543,765 | 2 |
| Total cars | ||||||
| Value of advances (£m) | 2,622 | -5 | 8,240 | -5 | 40,692 | 3 |
| Number of cars | 154,588 | -5 | 467,101 | -4 | 2,223,045 | -2 |
| Table 2: Cars bought on finance by businesses | ||||||
| New business | Feb 2023 | %
change on prev. year |
3
months to Feb 2023 |
% change on prev. year | 12 months to Feb 2023 | % change on prev. year |
| New cars | ||||||
| Number of cars | 21,532 | 34 | 77,448 | 28 | 291,664 | -3 |
| Used cars | ||||||
| Number of cars | 3,622 | -47 | 13,176 | -31 | 77,125 | 35 |