Double digit progress for used automotive finance as enterprise turns to pre-owned autos

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The used automotive sector delivered double-digit progress within the worth of latest client finance enterprise generated in July as provide points continued to subdue new automotive registrations.

Knowledge printed by the Finance and Leasing Affiliation (FLA) confirmed that the worth of advances obtained on new automotive gross sales reached £1.98 billion (up 13%) as volumes rose 3% to 129,687 year-on-year in a wider market down 5% by worth (to £3.31bn) and three% by quantity (to 181,926).

The uptick in used automotive exercise got here as the buyer new automotive finance market fell 5% by worth (to £1.34bn) and 14% by quantity (to 52,239) in July to go away new enterprise volumes down 5% on the identical interval in 2021.

In June, the UK’s new car finance suffered its “largest contraction” in new business volumes since February 2021’s COVID-19 lockdown interval

Geraldine Kilkelly, the FLA’s director of analysis and chief economist, stated: “The buyer new automotive finance market remained subdued in July as shortages of provide continued to disrupt the market’s post-pandemic restoration.

“Against this, the buyer used automotive finance market reported its ninth consecutive month of double-digit progress within the worth of latest enterprise and a return to progress in new enterprise volumes.”

Final month AM reported on Society of Motor Manufacturers and Traders (SMMT) new car registrations data which confirmed a 9% dip available in the market throughout July, to 112,162 models – representing a fifth consecutive month of sliding gross sales.

The FLA’s knowledge confirmed how companies have turned to the used automotive market as provide points stymied their efforts to purchase new autos.

Whereas the amount of latest automobiles purchased on finance by companies dropped 16% year-on-year in July, a complete of seven,717 used car gross sales have been funded, representing an uplift of 99%.

Kilkelly stated the motor finance sector remained in “a robust place” because it continued to facilitate automotive gross sales in an uncommon market.

She stated: “Regardless of the challenges posed by the worst inflationary atmosphere because the Seventies, the motor finance business stays in a robust place to proceed to satisfy demand for the financing of automotive purchases within the coming months, whereas offering focused assist to these prospects who might have it.

“As at all times, prospects who’re anxious about assembly funds ought to communicate to their lender as quickly as potential to discover a resolution.”

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