Consumer car finance new business volumes down 3% in January 2025, overall value up – FLA
The value of new business during the same period grew by 4%, indicating that while fewer agreements were made, the overall financial value of the market increased.
Figures released by the Finance & Leasing Association (FLA) have revealed that consumer car finance new business volumes in January 2025 fell by 3% compared with the same month in 2024.
However, the value of new business during the same period grew by 4%, indicating that while fewer agreements were made, the overall financial value of the market increased.
Over the 12 months to January 2025, the total volume of new business was 2% lower than during the same period in 2024, highlighting a modest but consistent decline in transaction numbers.
In the new car finance market, January 2025 saw a 14% increase in the value of new business compared to January 2024, while the volume of new business grew by 9%. Despite this positive start to the year, new business volumes in the 12 months to January 2025 were still 1% lower than the same period in 2024, reflecting an overall decline in activity over the longer term.
Conversely, the used car finance market experienced a decline in January 2025, with the value of new business falling by 2% and new business volumes dropping by 6% compared with January 2024. Over the 12 months to January 2025, volumes in this segment were 2% lower than in the corresponding period the previous year, indicating ongoing contraction in this area of the market.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The consumer new car finance market reported a third consecutive month of new business growth in January. By contrast, the consumer used car finance market reported a further single-digit contraction in new business over the same period. Both markets saw growth in average advances compared with January 2024.”
Kilkelly also shared the FLA’s outlook for 2025, predicting moderate growth in the overall market despite the current decline in used car finance.
She said: “Our latest research suggests the value of new business provided by the consumer car finance market will grow by 1% in 2025, with growth of 5% in the consumer new car finance market offset by a 2% fall in the consumer used car finance market.”
She further advised that consumers facing financial difficulties should proactively engage with their lenders: “As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”
