The consumer car finance market was worth a massive £4.3 billion in September alone as used cars drove the sector on.
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Figures released this month by the finance and leasing asscociation show consumers financed more than a quarter of a million vehicles in September, with used cars accounting for the majority of those. Almost 129,000 used cars were financed during the ninth month of the year, compared with more than 122,500 new cars.
Combined, the two figures represent an increase of four percent on September 2018, although the fortunes of the two markets were contrasting. The number of used cars financed by private buyers was up nine percent on September 2018’s result, and the value of advances on those cars was up by 12 percent, hitting £1.64 billion.
In comparison, the new car finance market actually slumped by one percent in terms of volume, although perhaps that’s no surprise given the ongoing woes of the new car industry in general. However, despite that, the value of advances handed out by financiers in September was up five percent on the same month last year. As a result, companies offered advances worth a total of more than £2.64 billion.
Perhaps more impressively, the reduction in volume didn’t stop financed vehicles accounting for more than 91 percent of private new car sales in September.
The figures follow data from the Society of Motor Manufacturers and Traders (SMMT), which revealed a slight rise in new car registrations during September, with more than 343,000 new cars registered. However, the market is down overall this year, with the first nine months of the year showing a 2.5 percent drop in registrations. Between the start of January and the end of September 2018, more than 1.91 million cars had been registered for the first time, but that fell to just over 1.86 million over the same period in 2019.
The FLA’s head of research and chief economist, Geraldine Kilkelly, said the used car market’s rise was particularly impressive, posting its strongest growth for more than a year.
“In September, the point-of-sale consumer used car finance market reported its strongest growth since August 2018, which contributed to an increase in new business volumes of five percent in the third quarter of 2019 as a whole,” she said. “The point-of-sale consumer car finance market overall reported stable new business volumes in the first nine months of 2019, in line with expectations.”