POS Motor Finance lending now over £30bn in the UK says new Apex Insight market report

Apex Insight has now released its latest research on the UK Car Dealer Point of Sale Finance market.

Captive finance companies have played a key role in driving market growth by offering subsidised finance packages, often 0%.  As the chart shows they account for over 40% of the market by volume (and the majority by value).

Finance penetration rates for new cars are unlikely to grow much above their current high levels.  But Apex Insight believes there is potential for further growth in the used car segment as the larger dealers, who are more likely to use finance, gain share from smaller dealers.

The market has attracted significant regulatory attention as it has been the biggest contributor to the growth in consumer credit in recent years with some fears of a bubble.  However, prior to the recent growth of POS finance, there was far wider use of credit cards, unsecured personal loans and second charge mortgages to fund cars. Hence, we believe the overall increase in car finance across all credit products is not as great as headline figures suggest.

UK new car sales have recovered to pre-recession levels but have recently dipped, however used car sales are still rising and the UK remains the largest used car market in Europe.

British consumers trade their cars more frequently than elsewhere in Europe and the hold periods have been coming down – to a large extent as a result of greater availability of finance

The report covers the car dealer POS finance market in depth and, in doing so:

• Quantifies the overall market size and historical growth rates.
• Analyses key market participants, including car dealers, specialist finance brokers and finance companies, and their relative market shares.
• Reviews market drivers behind car dealer POS finance growth, setting out historical trends and available forecasts.
• Provides our forecast for the market to 2021, supported by evidence from market drivers and industry interviews

The 2017 UK Car Dealer Point of Sale Finance market report is available now. It is one in a series of consumer credit market reports, covering markets including Point of Sale Finance, High-Cost Short-Term Credit, Pawnbroking, Debt Purchase / Collection, Rent to Own Retail and Home Credit.

About Apex Insight

Apex Insight is an independent provider of research and consulting services covering business and financial services markets in the UK and Europe. It publishes insightful market reports and carries out commercial due diligence and other bespoke consulting exercises to support managers, investors and advisers in making better business decisions.