Double-digit Growth Forecasted for Finance Market
The motor trade industry has been highly impacted by the coronavirus pandemic. While COVID-19 and subsequent lockdowns caused vehicle sales to decrease, dealers may soon find themselves enjoying a recovering market. With that said, businesses need to understand how the market is expected to change in order to reap the benefits.
According to projections by the Finance & Leasing Association (FLA), the consumer car finance market is expected to experience significant growth. The FLA has forecasted that the finance market will grow by 19 per cent in 2021 and a further 13 per cent in 2022. This projected growth is being attributed to pent-up demand and increased consumer confidence.
Not surprisingly, many other promising figures have been observed, such as:
- The consumer new car finance market reported that business volumes were up by 2,195 per cent in April 2021 compared to April 2020.
- The value of new consumer finance business for new cars grew by 2,370 per cent.
- The consumer used car finance market reported a 1,061 per cent increase in business in April 2021 compared to April 2020.
- The value of new consumer finance business for used cars grew by 1,204 per cent.
FLA director of research and chief economist Geraldine Kilkelly attributed the trends to showrooms reopening in April 2021, as well as the historically low level of business conducted in April 2020. In total, approximately 541,000 cars were purchased in the first four months of 2021. This amounted to a 37 per cent increase over the first four months of 2020.