24 June 2013
The Finance & Leasing Association (FLA) has today published the results of a new survey of expectations in the retail motor finance sector. The first edition of the quarterly FLA Retail Motor Finance Confidence Survey shows an optimistic outlook reflecting the strong performance reported by the motor finance industry since the beginning of 2012. The results show that:
- 83% of respondents expect growth in the retail new car finance market, with 35% expecting strong growth of between 10% and 20%.
- 95% of respondents expect growth in the retail used car finance market, with more than a fifth (21%) expecting growth of between 10% and 20%.
- 53% of respondents expect growth in the Light Commercial Vehicle finance market, with almost a quarter expecting growth of more than 10%.
Respondents also highlighted a number of potential risks to the industry’s performance in the year ahead, including any weakening of the economic outlook leading to falls in business and consumer confidence. Another concern was increased uncertainty regarding the transfer of consumer credit regulation to the new Financial Conduct Authority (FCA). The FLA is working with the Government and regulators to try to ensure that the new regulatory regime for consumer credit is proportionate. While much progress has been made, the FLA still has concerns about the timetable and transitional arrangements, and remains in close dialogue with policymakers.
Commenting on the findings, Paul Harrison, Head of Motor Finance at the FLA, said: “The survey brings together the views of leading executives and it is quite clear that they want a new regulatory regime which does not harm competitiveness or the availability of credit for consumers.
“Even though the new regulatory regime comes into force on 1 April 2014, on the Government’s current timetable the final rules will only have been published the previous month. A sensible transition is needed to ensure the industry and the new regulator are ready for what will be the biggest upheaval in consumer credit regulation for a generation.”
Notes to Editors
- Key results from the Retail Motor Finance Confidence Survey:
- In 2012, FLA members provided £76.4 billion of new finance to UK businesses and households. £54.9 billion of this was in the form of consumer credit representing about 30% of all unsecured lending in the UK.
- In 2012, motor finance provided by FLA members to consumers was£16.7 billion, helping to support the purchase of almost 1.5 million cars. In the twelve months to April 2013, FLA members financed 73.2% of private new car sales in the UK.