Consumer Car Finance Market Shows Steady Growth
According to the latest data released by the Finance & Leasing Association (FLA), consumer car finance new business volumes saw a 5% increase in September 2025 compared to the same month in 2024. This growth reflects a continuing recovery in the auto finance sector, particularly within the new car segment.
The value of new business in September also rose significantly, marking a 9% increase year-on-year. These statistics point to a strong resurgence in consumer demand and confidence in vehicle financing options.
Strong Performance in New Car Finance
The new car finance segment was a major contributor to this upward trend. In September 2025, both the number and value of new agreements grew by 11% compared to the same month in the previous year. This robust growth underlines the renewed interest among consumers in purchasing new vehicles through financing options.
From January to September 2025, the new car finance market saw a 7% increase in volumes compared to the same period in 2024. The consistent rise throughout the year indicates a stable and growing appetite for new car ownership through credit-based solutions.
Used Car Finance Shows Mixed Results
The used car finance segment also experienced some growth in September 2025. The value of new business increased by 6% compared to September 2024, although the new business volumes rose by a modest 1%.
However, the year-to-date figures tell a different story. Between January and September 2025, used car finance volumes declined by 2% on an annual basis. This slight downturn may reflect shifting consumer preferences towards newer vehicles or evolving market dynamics influenced by supply chain and pricing factors.
Electric Vehicles Drive Market Expansion
September 2025 was also notable for the increasing role of electric vehicles in the finance market. Geraldine Kilkelly, Chief Economist and Director of Research at the FLA, stated that it was a record month for battery electric vehicles (BEVs), with these vehicles accounting for 17% of total volumes financed by consumers at the point of sale.
This milestone suggests growing consumer acceptance of electric mobility, aided by broader infrastructure improvements and incentive programs. The finance sector is playing a crucial role in accelerating this transition by making electric vehicles more accessible through flexible financing options.
Market Outlook Remains Positive
Despite a weaker performance in August 2025—when new business volumes declined by 5% and the value dropped by 1% year-on-year—the overall market trend remains optimistic. Kilkelly commented, “The consumer car finance market returned to growth in September supported by a strong performance in the new car finance sector.”
She added that the market is on track to meet the FLA’s forecast of 6% growth in the value of new business for 2025 overall. This projection reflects confidence in the sector’s ability to sustain momentum amid evolving consumer needs and economic factors.
Support for Consumers Remains a Priority
FLA motor finance providers currently support over six million consumers in purchasing both new and used vehicles across the UK. This equates to helping more than one in ten UK adults stay mobile, highlighting the sector’s vital contribution to everyday transportation needs.
In light of ongoing financial uncertainty for some households, Kilkelly emphasized the importance of communication. “Customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution,” she advised.
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