FLA forecasts used car finance to fall 5% in 2024

Used car finance is expected to fall by 5% this year to £21 billion while new car purchases are forecast to grow by 5% to £18bn, according to new figures from the Finance & Leasing Association (FLA).

It added that consumer car finance new business volumes grew in February by 1% compared with the same month in 2023.

The corresponding value of new business was at a similar level to February 2023. In the first two months of 2024, new business by value and volume each fell by 1% compared with the same period in 2023. 

The consumer new car finance market reported new business by value in February 4% higher than in the same month in 2023, while new business volumes fell by 5%.  In the first two months of 2024, new business volumes in this market were 12% lower than in the same period in 2023. 

The consumer used car finance market reported a fall in the value of new business in February of 2% compared with the same month in 2023, while new business volumes increased by 2%.  In the first two months of 2024, new business volumes in this market were 2% higher than in the same period in 2023. 

Commenting on the figures, Geraldine Kilkelly, director of research and chief economist at the FLA, said: “February saw the consumer car finance market report its first growth in new business volumes overall since October 2022, supported by another positive month for the used car finance market. 

“FLA’s latest research suggests that the value of consumer car finance new business in 2024 will hold steady at £39bn.”

In 2023, FLA members provided £151bn of new finance to UK businesses and households. £113bn of this was in the form of consumer credit, almost a third of total new consumer credit written in the UK in 2023. £52bn of it supported the purchase of new and used cars, including over 78% of private new car registrations.