But the used car finance sector wasn't hit quite so badly.
The consumer car finance sector suffered in 2020 as the coronavirus pandemic cut sales, new figures have revealed. Data from the Finance and Leasing Association (FLA) shows the new car finance market slumped by roughly a quarter last year, and the used car finance market also suffered, albeit less dramatically.
FLA figures reveal just under 700,000 new cars were acquired on finance by private customers in 2020, down 21 percent on the figure seen in 2019. That result came after a disappointing December, in which the number of new cars bought on finance fell by 18 percent compared with the same month in 2019 despite the relaxation of the second coronavirus lockdown.
As a result, the FLA says its members offered private customers advances totalling almost £15.5 billion last year, but that was down 21 percent on 2019. In December alone, the value of advances afforded to private buyers was down by 18 percent in 2020, dipping well below December 2019’s figure.
However, the used car market enjoyed somewhat less disappointing form, with the number of vehicles financed by private buyers down by 18 percent. That meant private consumers took out finance deals on some 1.2 million used cars in 2020.
And the value of advances fell even less noticeably, with financiers dishing out more than £16.1 million in advances on used cars. That figure was down just 13 percent on the same figure in 2019, although that still equates to a seven-figure sum.
Geraldine Kilkelly, the head of research and chief economist at the FLA, said growth was expected in late 2021 as the Covid-19 vaccines are expected to take effect.
“The lifting of the second national lockdown in England in December contributed to an easing in the rate of contraction in new business in both the consumer new and used car finance market,” she said “Despite the restrictions introduced throughout last year as a result of the pandemic, the consumer car finance market provided finance for over 1.9 million cars in 2020 as a whole.
“The vaccine rollout in the UK has improved the outlook for the UK economy in the second half of 2021. Almost two-thirds of motor finance respondents to the FLA’s Q1 2021 Industry Outlook Survey expected some growth in new business over the next year if economic conditions improve.”