The value of new car finance market in the UK is set to grow 8% in 2025 according to the latest data.
The Finance & Leasing Association said consumers were more upbeat about prospects with lower interest rates.
“Consumer confidence has shown signs of improving following a further cut in interest rates by the Bank of England.
“Our latest research suggests that the consumer car finance market will see the value of new business increase by 6% in 2025 as a whole, with growth of 8% in the new car finance market and 4% growth in the used car finance market,” said Geraldine Kilkelly, director of research and chief economist at the FLA.
Kilkelly’s comments came as the FLA released figures for July which showed that consumer car finance new business volumes grew in July 2025 by 1% compared with the same month in 2024.
The corresponding value of new business grew by 4% over the same period. In the seven months to July 2025, new business volumes were also 1% higher than in the same period in 2024.
The consumer new car finance market reported new business by value in July 2% higher than in the same month in 2024, while new business volumes grew by 1%. In the seven months to July 2025, new business volumes in this market were 7% higher than in the same period in 2024.
The consumer used car finance market reported the value of new business in July 6% higher than in the same month in 2024, while new business volumes held steady. In the seven months to July 2025, new business volumes in this market were 2% lower than in the same period in 2024.