Consumer car finance market sees strongest growth in over three years

Consumer car finance new business volumes rose by 11% in March 2025 compared to the same month in 2024, according to new data released today by the Finance & Leasing Association (FLA). The value of new business also rose by 18% during this period, indicating robust performance in the sector. For the first quarter of 2025, new business volumes were up 3% compared to Q1 2024.

In the new car finance segment, March saw a 21% increase in new business volumes and a 25% rise in value compared to March 2024. In Q1 2025, new business volumes in this market were 16% higher than in Q1 2024.

The used car finance market also experienced growth, with a 3% increase in volumes and a 9% rise in value during the same period. In Q1 2025, new business volumes in this market were 3% lower than in Q1 2024.

These positive trends suggest that recent concerns over commission disclosure practices in the motor finance industry have not deterred consumer demand. Despite ongoing scrutiny and legal proceedings related to undisclosed commissions, consumers continue to engage actively in the car finance market.

“March saw the consumer car finance market report its strongest rate of growth in more than three years supported by the issue of a new registration plate, consumers bringing forward new car purchases ahead of increases in vehicle excise duty from April 2025, and slightly more working days in March 2025 than in the same month in 2024 due to the timing of Easter.

“The outlook remains uncertain with the latest indicators of consumer confidence showing a significant downturn in sentiment about economic conditions. Further cuts in interest rates should help to ease some of the pressure on real household disposable incomes.”

Table 1: Cars bought on finance by consumers through the point of sale
New business	Mar 2025	%  change on prev. year	3 months to Mar 2025	% change on prev. year	12 months to Mar 2025	% change on prev. year
New cars
Value of advances (£m)	3,143	25	5,319	20	18,499	10
Number of cars	109,206	21	186,452	16	651,254	4
Used cars
Value of advances (£m)	2,010	9	5,826	2	21,261	-2
Number of cars	129,774	3	380,317	-3	1,414,146	-2
Total cars
Value of advances (£m)	5,153	18	11,145	10	39,760	3
Number of cars	238,980	11	566,769	3	2,065,400	0
Table 2: Cars bought on finance by businesses
New business	Mar 2025	%  change on prev. year	3 months to Mar 2025	% change on prev. year	12 months to Mar 2025	% change on prev. year
New cars
Number of cars	41,185	23	93,703	9	358,317	-5
Used cars
Number of cars	4,317	1	12,158	-12	53,827	-12