Business Car Sales Drive Used Sector Finance Growth
- September 16, 2019
- Posted by: Josh Locke
- Category: Automotive Industry
Point-of-sale financing for used car sales to businesses fuelled a dramatic increase in the total sector with the second-hand market comfortably accelerating ahead of the new car sector.
The latest data from the Finance & Leasing Association show the POS consumer used car finance market reported new business in July up eight per cent by value and the number of cars transacted by seven per cent to 134,000. In the 12-month period, the figures were plus seven and three per cent respectively.
But these gains were dwarfed by the uplift in the used cars-to-business market which performed particularly well. There was a 12% increase in the number of cars bought and sold this way with almost 4,000 deals being done in July, a 13% gain in the three months to July against the same period last year for 14,000 cars. The 12-month timeframe saw an 11% rise to 61,500 sales.
In contrast, POS growth for new cars did nearly as well in July with 11% more being written but in the previous three months it was static and the annual figures saw a drop of five per cent.
The Main Driver of Headline Growth
The used car sector generally became the main driver for the first uplift in total point-of-sale finance since February and earlier figures show that POS financing for second-hand cars has more than trebled this decade and volumes doubled.
Geraldine Kilkelly, head of research and chief economist at the FLA, said:
“In July, the point-of-sale consumer car finance market reported growth for the first time since February 2019. The consumer used car finance market was the main driver of headline growth in July as new business volumes increased at their strongest rate since October 2018.”
Last year FLA members provided £136 billion of new finance to UK businesses and households. £103b of this was in the form of consumer credit, over a third of total new consumer credit written in the UK in 2018. £46b of it supported the purchase of new and used cars, including over 91% of private new car registrations.
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