Figures released by the Finance & Leasing Association (FLA) show that consumer car finance new business volumes grew in March 2025 by 11% compared with the same month in 2024.
The corresponding value of new business grew by 18% over the same period.
The quarterly figures for Q1 2025 show new business was 3% higher by volume compared with Q1 2024.
The consumer new car finance market reported particularly strong results, with new business by value in March 25% higher than in the same month in 2024, while new business volumes grew by 21%.
In Q1 2025, new business volumes in this market were 16% higher than in Q1 2024, indicating sustained growth in the new car segment despite broader economic challenges.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “March saw the consumer car finance market report its strongest rate of growth in more than three years supported by the issue of a new registration plate, consumers bringing forward new car purchases ahead of increases in vehicle excise duty from April 2025, and slightly more working days in March 2025 than in the same month in 2024 due to the timing of Easter.”
While new car finance showed robust growth, the consumer used car finance market reported more modest increases, with the value of new business in March 9% higher than in the same month in 2024, and new business volumes growing by 3%.
The Q1 2025 figures for the used car market actually showed a decline, with new business volumes 3% lower than in Q1 2024, highlighting the divergence between new and used car finance sectors.
Kilkelly added: “The outlook remains uncertain with the latest indicators of consumer confidence showing a significant downturn in sentiment about economic conditions.
“Further cuts in interest rates should help to ease some of the pressure on real household disposable incomes.
“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”