Total asset finance new business (primarily leasing and hire purchase) fell by 14% in October 2020 compared with the same month in 2019, according to figures released today by the Finance & Leasing Association (FLA).

In the ten months to October 2020, new business was 26% lower than in the same period in 2019, the FLA said.

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The commercial vehicle finance sector reported a fall in new business of 6% in October 2020 compared with the same month in 2019.  Over the same period, the IT equipment finance and plant and machinery finance sectors reported falls in new business of 31% and 20% respectively.

FLA

Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “Increased business uncertainty from the introduction of new restrictions to tackle rising coronavirus cases and the lack of a free trade agreement with the EU has weighed on business investment and demand for asset finance.

“The FLA’s latest data shows that asset finance new business was 26% lower in the ten months to October 2020 than in the same period in 2019.

“The outlook for the UK economy has improved with the promised rollout of a vaccine before Christmas. The asset finance industry is in an ideal position to support businesses as they make the investment needed to increase productivity and build a sustainable future post-crisis. We urge the Government and Bank of England to ensure a level playing field so that non-banks can continue to lend to those businesses that will drive change.”

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Consumer car market

The FLA said the consumer car finance market reported a fall in new business volumes of 3% in October 2020 compared with the same month in 2019.  In the ten months to October 2020, new business volumes in this market were 20% lower than in the same period in 2019.

The consumer new car finance market reported a fall in new business volumes of 4% in October 2020 compared with the same month in 2019. In the ten months to October 2020, new business volumes in this market fell by 25% compared with the same period in the previous year. The percentage of private new car sales financed by FLA members in the twelve months to October 2020 was 94.1%, up from 91.7% in the same period in 2019.

The consumer used car finance market reported a fall in new business volumes of 2% in October 2020 compared with the same month in 2019. In the ten months to October 2020, new business volumes in this market fell by 17% compared with the same period in the previous year.