December 2019 Reported Highest Recorded Average Car Financing
17 Feb 2020
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- According to data reported by the FLA, both the new and used car markets picked up pace as far as car financing is concerned.
- The average loan in the new car market amounted to £23,000 and in the used car market amounted to £13,000, in the month of December 2019.
- Experts believe this uptrend in car financing should continue in 2020 as well if consumer confidence also increases as expected.
Recently reported data has revealed that the car market in the UK has shown impressive performance during 2019, and this is also evident by the growth of 3% in the car financing industry, according to reports
released by the Finance and Leasing Association (FLA).
Interestingly, the number of cars financed during the year did not grow, remaining at approx. 2.4 million, even though the value of new businesses increased all the way up to £38 billion. Most of the growth in the auto financing sector came from funding the used car market, whereby advances increase by around 4% on a YoY basis, while the number of vehicles behind funded increased by around 2%.
As far as the new car market is concerned, advances still increased by 1% YoY, which is surprising considering the total number of new cars financed during the year fell by approx. 3% and stood at a little over 933,000 by year-end. However, this happened because borrowers opted for vehicles that were more expensive, requiring more financing.
December was an especially strong month as far as growth in auto financing is concerned. According to reported figures, total advances in terms of value increased by approximately 15% compared with figures reported a year earlier in December 2018, while sales of new cars increased by approx. 4%.
The data also revealed that 91.7% of all private new cars were financed by members of the FLA during 2019.
In the market for used cars, advances increased by 11% and car sales increased by an impressive 7%, on a YoY basis, during the final month of 2019.
According to the analysis presented in the FLA report, the average loan approved during the month of December, for both new and used cars, also reached a record high. New car loans averaged at £23,000, while the average loan approved for a used car amounted to approx. £13,000.
However, this uptrend has been in line with the expectations held by experts, at least according to Geraldine Kilkelly who heads research as well as is a chief economist for the FLA. Kilkelly expects this uptrend to continue in 2020 as well, provided consumer confidence rises during the year.