Car finance levels continuing at record pace

- Advertisement -

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.

- Advertisement -
Stuart Masson
Stuart Massonhttps://www.thecarexpert.co.uk/
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.

Latest Expert Advice

Drivers urged to book MOT tests now to avoid the rush

Drivers are being urged to get their cars MOT tested this summer to avoid the rush once the six-month coronavirus extension expires in August.

Mandatory MOT tests to return from August

Mandatory MOT tests for cars more than three years old will return from August, the government has announced today.

Latest Expert Ratings

Alfa Romeo Giulia Quadrifoglio

The Alfa Romeo Giulia Quadrifoglio has been universally praised, with many UK reviewers rating it more highly than the benchmark BMW M3.

Toyota Prius

The Toyota Prius has always been well-known for its eco credentials, but the latest model is also a considerable improvement to drive.

Mid-life facelift for Bentley Bentayga

Bentley has revealed its updated Bentayga, with a styling makeover to match the rest of the range, as well as several tech upgrades.

Citroën reveals new C4 and electric ë-C4

Citroën has revealed its latest-generation C4 range, bringing a fresh new look alongside a new electric model called the ë-C4.

Volvo recalls nearly 170,000 cars in the UK for seatbelt fault

Volvo has issued a recall of nearly 170,000 cars in the UK due to a cable that could wear over time and result in reduced seatbelt function.

Drivers urged to book MOT tests now to avoid the rush

Drivers are being urged to get their cars MOT tested this summer to avoid the rush once the six-month coronavirus extension expires in August.

More from The Car Expert

Expert Advice

Award-winning, independent and impartial advice on buying, financing, owning and running a car

Expert Ratings

We analyse and aggregate dozens of media reviews for each new car into an overall Expert Rating

Expert News

All the most important new car launches, model updates, car reviews and industry news

Expert Partners

Our new space for commercial partners to bring you special offers on their products and services

What are your thoughts? Let us know below.