Car buyers increased volumes in the consumer auto finance industry by 12% in June – a year after the UK’s first coronavirus lockdown was eased in 2020.
Data from the Finance and Leasing Association (FLA) showed that new business volumes were up 25% from new car sales (to 88,862), as used car sales generated an increase of 6% of volumes (to 129,836) last month.
The value of the new business rose 29% to Â£ 1.80bn in new cars and 9% to Â£ 1.77bn in used cars, he said .
Overall, new market funding volumes rose 12% to 207,698, with the value of advances up 18% to Â£ 3.57 billion.
This rise occurred against the backdrop of a retail car industry that manages a limited supply of new cars, resulting from the global shortage of semiconductor chips and a corresponding increase in the value of cars. second-hand cars.
However, the recovery of auto finance in the UK could be on the verge of slowing down, according to Geraldine Kilkelly, research director and chief economist of the FLA.
Kilkelly said, âThe consumer auto finance market continued to show solid growth in June, but as expected, growth rates are starting to moderate.
âThe results for the first half of 2021 show that new levels of activity have picked up sharply as restrictions to deal with the pandemic have been gradually relaxed.
âThe value of new consumer auto finance business in the first half of 2021 was only 8% lower than in the first half of 2019.
âOur latest research suggests that the industry has maintained its optimism about growth opportunities despite the risks to the economic recovery resulting from new waves of COVID-19.
âThe FLA’s Third Quarter 2021 Industry Outlook Survey shows that 91% of auto finance providers expected new business growth in the next twelve months. “
Last week, Cox Automotive cut its used car sales forecast for 2021 just a week after cutting its new car registrations forecast for the remainder of the year.
Cox’s forecast for the year 2021 is now 6,766,250 used car sales, down 0.6% (40,414 units) from its April forecast and 8.3% compared to the 2000-2019 average.
Its full-year registration forecast is now 1,823,426, up 11.8% from performance impacted by last year’s COVID-19, but down 2.48% (46 349 units) compared to Cox’s April forecast and 21.1% compared to the 2000 to 2019 average.
Cox Director of Vision and Strategy Phillip Nothard believes new car supply issues and high used car values ââare likely to remain in play until 2022.