The Car Finance Industry

In 2022, amidst the backdrop of economic fluctuations and technological advancements, the car finance sector continued to demonstrate resilience and adaptability. With total borrowing reaching nearly £41 billion, a staggering 9% increase from the previous year, the demand for motor finance solutions has never been greater.

As consumers navigate through the myriad of options ranging from personal contract purchases (PCP) to hire-purchase (HP) agreements, we are here to provide information and education so that they can remain informed and help them reduce the chances of making decisions which are not in their best interests.

Join us as we explore the latest trends, regulatory developments, and consumer behaviour impacting the car finance landscape, ensuring you stay informed and ahead of the curve.

Industry Statistics

New Car Finance

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Borrowed

In 2020, approximately 16% of UK adults with hire purchase (HP) or personal contract purchase (PCP) motor finance borrowed £20,000 or more.

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Billion

The total amount borrowed for new car finance in 2022 was £17.3 billion

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Average Borrowed

The average borrowing amount for new cars increased by 6%, from £23,746 in 2021 to £25,325 in 2022.

Used Car Finance

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Used Cars Financed in 2022

The number of used cars financed in 2022 significantly increased by 8%, from 1,361,878 in 2021 to 1,530,572

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Billion

The total borrowing in the used car finance market surged by 18%, from £19.2 billion in 2021 to £23.4 billion in 2022.

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Average Borrowed

The average finance amount for used cars also increased substantially. In 2022, the average borrowing for a used car was £15,475, which was a 10% increase from the £14,113 average in 2021.

Car Finance Claims

Relating to the FCA mystery shop, report and statem

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Of Brokers

Only 28% of brokers tested by the FCA provided a full explanation of the total amount payable under the finance agreement to customers.

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Retailers

Only 11 of the 122 (9.01%) retailers checked told their customers that the dealership would receive a commission for arranging the deal.

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Consumers Overcharged

Some car buyers are being overcharged by more than £1,000 when they take out a loan to buy a car, the UK’s financial watchdog has warned.

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Complaints

While a ban came into place in 2021, the Financial Ombudsman Service (FOS) says it’s heard from more than 10,000 people who think they were overcharged.

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Million

The FCA estimates the ban that came into place will save customers £165 million a year.

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Of deals had commission

The FCA estimates that up to 95% of car finance deals before the new ban came into place had some form of commission model. In approximately 4 in 10 of those cases the higher the interest rate you were charged, the more commission the broker would get.

“We found that some motor dealers are overcharging unsuspecting customers over a thousand pounds in interest charges in order to obtain bigger commission payouts for themselves.”

Jonathan Davidson, Financial Conduct Authority

Car Finance Industry News