Consumer car finance volumes rose 3% in April as strong demand for new cars offset a decline in used car finance activity.
New figures from the Finance & Leasing Association (FLA) show the value of consumer car finance new business increased by 9% year-on-year in April, while volumes grew by 3%.
The growth was driven by a strong performance in the new car market, where finance volumes increased by 21% and the value of advances rose by 25% compared with April 2025.
In total, 53,381 new cars were financed through point-of-sale consumer finance agreements during the month, compared with 118,317 used cars.
Across the first four months of 2026, new car finance volumes were up 16% year-on-year, while overall consumer car finance volumes increased by 4%.
Used car finance volumes down by 3%
By contrast, used car finance activity remained under pressure.
The value of new business in the used car finance market fell by 2% in April, while volumes declined by 3%.
Over the first four months of the year, used car finance volumes were 2% lower than during the same period in 2025.
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The FLA said the market had made a positive start to Q2, despite ongoing economic challenges.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The consumer car finance market made a positive start to the second quarter of 2026, driven by strong growth in new car finance.
“In the near term, the backdrop remains challenging, with cost pressures, weak confidence and higher interest rates weighing on activity.”
Kilkelly said the recent US-Iran agreement has marked a turning point, offering greater stability in energy markets and improving the medium-term outlook for growth and inflation.
She added: “Looking ahead, there are clear opportunities for the motor finance market, particularly in the continued expansion of new and used electric vehicle markets.
“FLA members will play a central role in supporting this transition, enabling access to newer, more efficient vehicles and supporting mobility across the UK.”