Car finance levels continuing at record pace


The latest consumer car finance figures show that customers are still borrowing more and more money on both new and used cars.

Results for April 2018, released last week by the Finance and Leasing Association, show that the number of new car finance deals matched the strong growth in private new car sales in the same month, bouncing back from a very poor month in April last year. The value of that lending continued to increase, resulting in about a 3% increase in average new car borrowing on private new cars.

Used cars also had a very strong month in April, after a small drop in March. While used car sales figures for the quarter won’t be released for a few months, a 20% increase in the number of used car finance deals was recorded. Combined with a 28% increase in the amount of money lent to consumers, this resulted in a 6% increase in the average borrowing on used cars. This made April the strongest month of the year to date for used car finance, which is unusual.

Cars bought on finance by consumers through dealerships
New businessApr 2018% change on prev. year3 months to Apr 2018% change on prev. year12 months to Apr 2018% change on prev. year
New cars
Value of advances (£m)1,606+31%5,883+2%18,962+1%
Number of cars81,734+27%300,464-4%974,659-8%
Used cars
Value of advances (£m)1,569+28%4,474+15%16,282+14%
Number of cars134,159+20%383,666+10%1,406,333+8%
Total cars
Value of advances (£m)3,174+29%10,357+7%35,244+6%
Number of cars215,893+23%684,130+3%2,380,992+1%

Data (c) Finance and Leasing Association

Finance market continuing at record levels


Looking back at the results o er the last 12 months, the value of lending on new cars continues to increase despite the sales slump of the last year. Meanwhile, the used car market is continuing its steady march onwards and upwards. In fact, the total lending on used cars is closing in on the lending for new cars (albeit based on a greater number of deals).

Nearly 90% of all private new car sales are financed at point of sale through dealer-sourced finance, a number which continues to creep upwards. The majority of these sales are funded using a personal contract purchase (PCP), with an ever-decreasing number of private new car buyers using cash or other sources of finance to purchase their cars.


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Stuart Masson
Stuart Masson
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.

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