Consumer car finance new business falls by 5% in April

New data from the Finance & Leasing Association (FLA) reveals that consumer car finance new business volumes declined by 5% in April 2025 compared to the same month in 2024. The value of this new business also dipped, falling by 2% year-on-year.

This marks the first decline in new business since October 2024, as consumers faced rising costs across essential services and higher vehicle excise duties. Despite this setback, cumulative figures for the first four months of 2025 show new business volumes were still up 1% compared to the same period last year.

Breaking the figures down, the consumer new car finance market experienced sharper declines. New business volumes dropped by 8% in April, with the value of new business falling 7% year-on-year. However, performance over the broader period remains strong, with volumes up 11% in the first four months of 2025 compared to the same timeframe in 2024.

In contrast, the used car finance market presented a mixed picture. April saw a 2% increase in new business volumes despite a 4% decline in the value of new business. Over the January to April period, volumes were down 3% compared to 2024.

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “April saw the consumer car finance market report its first fall in new business since October 2024 as higher vehicle excise duties took effect, and consumer spending power was hit by higher energy, telephone and water bills.

“The FLA’s Q2 2025 industry outlook survey results showed that three-quarters of motor finance respondents expected some increase in new business over the next year despite subdued consumer and business confidence. The prospect of further cuts in interest rates, strong consumer savings, and the potential for growth as the UK transitions to greener assets should contribute to single-digit new business growth by value over the next 12 months.”

Table 1: Cars bought on finance by consumers through the point of sale
New business	Apr 2025	% change on prev. year	3 months to Apr 2025	% change on prev. year	12 months to Apr 2025	% change on prev. year
New cars
Value of advances (£m)	1,222	-7	5,344	15	18,408	9
Number of cars	44,184	-8	188,666	12	647,307	3
Used cars
Value of advances (£m)	1,910	2	5,760	3	21,289	-3
Number of cars	122,418	-4	372,140	-2	1,408,665	-3
Total cars
Value of advances (£m)	3,132	-2	11,104	9	39,696	2
Number of cars	166,602	-5	560,806	2	2,055,972	-1
Table 2: Cars bought on finance by businesses
New business	Apr 2025	% change on prev. year	3 months to Apr 2025	% change on prev. year	12 months to Apr 2025	% change on prev. year
New cars
Number of cars	31,145	-10	99,247	7	355,093	-7
Used cars
Number of cars	6,205	32	14,307	6	55,318	-11