The Motor Finance Industry

Key Indicators Review

It seems that the motor finance industry is showing early signs of recovery, with an increased appetite for lending and some (reserved) resurgence in consumer confidence.

According to the Finance and Leasing Association (FLA), motor finance providers have reported an increase in both business and consumer new business volumes.

In March, new business volumes were up by 6% to 242,047, with the first quarter of 2013 seeing an increase in car finance volumes of 11% to 532,545.

The same month saw the issue of a new registration plate, with a 7.8% increase in private new car sales. The number of new cars bought on finance by consumers through dealerships also grew; 18% up to 127,084, in March.

New business volumes for the consumer used car finance market reduced for the first time in March, since September 2012. Compared with March 2012, the number of used cars bought on finance by consumers through dealerships fell by 1% to 73,509.

Several of our motor finance and lender clients anticipate that this growth in new business will lead to an increase in default and consumer debt collection / vehicle repossession requirements. A recurring view is that 18-24 months from now, lenders will need to increase resources in collections and recovery.

Let us know what you think!