Client spending is predicted to stay subdued within the coming months regardless of the current minimize in rates of interest.
That’s the view of the Finance & Leasing Affiliation (FLA), which stated over 40% of motor finance homes anticipated some enhance in enterprise within the coming months.
The patron new automotive finance market reported new enterprise by worth in December 15% greater than in the identical month in 2023, whereas new enterprise volumes grew by 7%. In 2024 total, new enterprise volumes on this market had been 2% decrease than in 2023.
The patron used automotive finance market reported a fall within the worth of latest enterprise in December of two% in contrast with the identical month in 2023, whereas new enterprise volumes decreased by 4%.
In 2024 total, new enterprise volumes on this market had been 1% decrease than in 2023.
Geraldine Kilkelly, director of analysis and chief economist on the FLA, stated: “The patron automotive finance market ended the 12 months on a optimistic notice with a second consecutive month of development within the worth of latest enterprise.
“In 2024 total, new enterprise by worth reached £39bn, an analogous degree to 2023, whereas new enterprise volumes fell by solely 2% to 2.1 million.
“The current minimize in Financial institution fee will assist to ease the stress on family incomes however shopper spending is predicted to stay subdued.
FLA’s newest trade outlook survey recommended that over 40% of motor finance respondents anticipated some enhance in new enterprise over the subsequent 12 months.
Desk 1: Vehicles purchased on finance by shoppers via the purpose of sale
New enterprise
Dec 2024
%
change on prev. 12 months
3months to Dec 2024
% change on prev. 12 months
12 months to Dec 2024
% change on prev. 12 months
New vehicles
Worth of advances (£m)
1,254
15
4,041
8
17,706
5
Variety of vehicles
41,205
7
137,754
1
627,257
-2
Used vehicles
Worth of advances (£m)
1,303
-2
4,667
-2
21,281
-4
Variety of vehicles
84,607
-4
308,419
-3
1,438,805
-1
Whole vehicles
Worth of advances (£m)
2,557
6
8,708
2
38,988
0
Variety of vehicles
125,812
0
446,173
-2
2,066,062
-2
Desk 2: Vehicles purchased on finance by companies
New enterprise
Dec 2024
%
change on prev.
12 months
3
months to Dec
2024
% change on prev. 12 months
12 months to Dec 2024
% change on prev. 12 months
New vehicles
Variety of vehicles
29,829
-10
91,654
-9
351,100
-6
Used vehicles
Variety of vehicles
3,479
-30
11,631
-30
55,545
-11
