Consumer car finance grows 1% as new car demand strengthens

Consumer car finance new business volumes increased by 1% in August 2026 compared with the same month last year, driven by strong growth in new car finance, according to the latest figures from the Finance & Leasing Association (FLA).

The value of consumer car finance new business rose by 3% year-on-year to £2.82bn, with 149,343 vehicles financed during the month.

In the first eight months of 2026, total consumer car finance volumes were 3% higher than in the corresponding period of 2025.

However, the latest figures reveal a continuing divergence between the new and used car finance markets, with strong growth in new car financing offsetting a decline in used car finance business.

New car finance volumes rise 22%

The consumer new car finance market recorded a 22% increase in new business volumes in August, with 42,040 vehicles financed.

The value of advances rose by 21% to £1.17bn compared with August 2025.

In the eight months to August, new car finance volumes were 17% higher than in the same period last year, reflecting continued growth in the new car market.

Over the latest 12-month period, new car finance volumes increased by 15% to 748,287 vehicles, while the value of advances also grew by 15% to £21.35bn.

By contrast, the consumer used car finance market reported a 6% decline in both new business volumes and value during August.

A total of 107,303 used cars were financed, with advances worth £1.65bn.

In the first eight months of 2026, used car finance volumes were 3% lower than in the corresponding period of 2025.

Over the latest 12 months, used car finance volumes fell by 2% to 1.38 million vehicles, although the value of advances remained unchanged at £21.52bn.

Business car finance continues to grow

The FLA figures also showed growth in the business car finance market.

New car finance volumes for businesses increased by 6% in August to 23,561 vehicles, while used car finance volumes rose by 23% to 4,748 vehicles.

Over the latest 12-month period, business new car finance volumes increased by 8% to 373,856 vehicles, while used car finance volumes grew by 22% to 60,459 vehicles.

FLA calls for vehicle tax certainty ahead of Budget

“Consumer car finance continued to perform strongly in August, reflecting ongoing growth in the new car market. FLA members financed 89% of private new car sales, demonstrating the central role of finance in helping consumers access affordable transport and spread the cost of vehicle ownership.

“This week’s Budget provides an opportunity to support continued investment in newer and lower-emission vehicles. A clear and predictable approach to vehicle taxation, including incentives that encourage the adoption of used electric vehicles, would give consumers greater confidence to make long-term purchasing decisions.

“At a time when economic uncertainty remains elevated, policies that support consumer confidence and encourage investment are likely to deliver greater benefits for growth than measures that increase the cost of ownership or create further uncertainty.”

The figures highlight the contrasting performance of the new and used car finance markets, with overall growth continuing to depend heavily on demand for new vehicles.

With the Autumn Budget taking place on 28 October, the FLA has emphasised the importance of policies that support affordability, consumer confidence and the transition to lower-emission vehicles.

Table 1: Cars bought on finance by consumers through the point of sale
New business	Aug 2026	%  change on prev. year	3 months to Aug 2026	% change on prev. year	12 months to Aug 2026	% change on prev. year
New cars
Value of advances (£m)	1,172	21	4,762	17	21,345	15
Number of cars	42,040	22	166,967	18	748,287	15
Used cars
Value of advances (£m)	1,650	-6	5,301	-4	21,519	0
Number of cars	107,303	-6	341,366	-4	1,375,849	-2
Total cars
Value of advances (£m)	2,822	3	10,064	5	42,864	7
Number of cars	149,343	1	508,333	2	2,124,136	3
Table 2: Cars bought on finance by businesses
New business	Aug 2026	%  change on prev. year	3 months to Aug 2026	% change on prev. year	12 months to Aug 2026	% change on prev. year
New cars
Number of cars	23,561	6	91,178	14	373,856	8
Used cars
Number of cars	4,748	23	15,525	20	60,459	22