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New Business Consumer Car Finance Volumes Drop In 2020

March 2, 2021 by mti

Figures published by the Finance and Leasing Association (FLA) reveal that the volume of new business consumer car finance amongst its members in the UK fell in 2020 when compared with the previous year. There was a reduction of 21% – a considerable drop.

This will probably not come as a surprise to motor traders as many will have seen a significant drop in the sale of both new and used cars in 2020 as a result of the pandemic.

The volume of new business consumer car finance for new cars dropped by 25% in 2020 in comparison to 2019.

The volume of new business consumer car finance for used cars dropped by 18% in 2020 in comparison to 2019.

It is to be hoped that we will see a turnaround in these figures in 2021 but the impact of the pandemic will no doubt have an effect on the numbers of new and used cars being sold and therefore the volume of new car finance being arranged.

On a positive note, there was an increase in percentage terms in finance arranged by members of the Finance and Leasing Association (FLA) for private new car sales. In the 12 months to December 2020 the figure was 93.2% whereas in 2019 it was 91.7%.

Whilst writing, we thought it worth mentioning that car production in the UK fell from 118,314 in January 2020 to 86,052 in January 2021 according to the Society of Motor Manufacturers and Traders (SMMT). That is a drop of 27.3%. 16,692 cars were built for the home market – down 18.3% and 69,360 were built for export – down 29.1% On a positive note, the number of new hybrid cars, plug-in hybrid cars and battery electric cars manufactured in the UK rose by 18.9% to 21,792 when comparing January 2021 with January 2020.

It is also disappointing to read that engine manufacturing in the UK fell from 238,193 in January 2020 to 168,291 in January 2021 – a drop of 29.3% according to the Society of Motor Manufacturers and Traders (SMMT). 71,160 engines were built for the home market – down 27.2% and 97,131 were built for export – down 30.8%.

Again, let us hope that we see an improvement in the number of cars and engines built here in the UK in the short term. There will no doubt be many sectors of the motor trade industry that have been and continue to suffer financially as a result of the pandemic.


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