[ad_1]
The consumer used car financing business by value is expected to fall 12% in 2023 to £21 billion.
That’s the latest forecast from the Finance & Leasing Association (FLA) which says that household spending is likely to remain relatively weak in the first half due to pressure on household incomes from high inflation, and continued higher interest rates and taxes.
It said the value of new business provided to consumers on new car purchases is expected to grow by 4% in 2023 to £18 billion as supply increases.
The forecast comes as the FLA reports its new auto finance business in January.
The consumer new car finance market reported a decline in new business of 6% by value and 10% by volume in January compared to the same month in 2022.
In the twelve months to January 2023, the volume of new business in this market also decreased by 10% compared to the same period in 2022.
The consumer used car finance market reported new business volume in January at the same level as the same month in 2022, while the value of new business fell by 4% over the same period.
In the twelve months leading up to January 2023, the volume of new business in this market grew by 4% compared to the same period in 2022.
Geraldine Kilkelly, research director and chief economist at FLA, said: “The consumer auto finance market reported a modest decline in new business in January.
“In the first half of 2023, household spending is likely to remain relatively weak due to pressure on household incomes from high inflation, and continued higher interest rates and taxes, but we should see further easing of supply shortages in the new car market as current year.
“The FLA’s latest research shows that the value of the new consumer car finance business is likely to contract by 6% in 2023 to £38 billion.
“The value of new business provided to consumers for the purchase of a new car is expected to grow by 4% in 2023 to £18 billion, while the new consumer used car financing business by value is expected to decline by 12% in 2023 to £21 billion.
“As always, customers who are concerned about payments should speak to their lender as soon as possible to find a solution.”
| Table 1: Cars purchased on a consumer financing basis through the point of sale | ||||||
| New business | January 2023 | % change in the previous year | 3 months through January 2023 | % change in previous year | 12 months to Jan 2023 | % change in previous year |
| New car | ||||||
| Down payment value (£m) | 1225 | -6 | 3,712 | -5 | 17,186 | -4 |
| Number of cars | 48,414 | -10 | 142,042 | -11 | 678,561 | -10 |
| Used car | ||||||
| Down payment value (£m) | 1908 | -4 | 4,929 | -4 | 23,393 | 13 |
| Number of cars | 131,039 | 0 | 332,997 | -1 | 1,530,405 | 4 |
| Number of cars | ||||||
| Down payment value (£m) | 3.133 | -5 | 8,641 | -5 | 40,579 | 5 |
| Number of cars | 179,453 | -3 | 475,039 | -5 | 2,208,966 | 0 |
| Table 2: Cars purchased financed by businesses | ||||||
| New business | January 2023 | % change to before year | 3 month to January 2023 | % change in previous year | 12 months to Jan 2023 | % change in previous year |
| New car | ||||||
| Number of cars | 24,827 | 22 | 82,734 | 23 | 286,226 | -5 |
| Used car | ||||||
| Number of cars | 6003 | -27 | 14,193 | -15 | 80047 | 49 |
[ad_2]
Source link
