Did New Car Finance Jump 21% in April 2026? Full Breakdown of the Latest FLA Figures
New car finance volumes rose 21% in April 2026 while used car lending slipped – discover what this means for UK dealers.
April 2026 Car Finance: The Numbers at a Glance
The Finance & Leasing Association (FLA) has released its latest quarterly data, revealing that consumer car‑finance new business volumes grew by 3% year‑on‑year in April 2026. The overall value of this new business was 9% higher than in April 2025, and the first four months of the year saw a cumulative volume increase of 4% compared with the same period in 2025.
Why New Car Finance Is Surging
Within the consumer market, the new‑car finance segment delivered a striking performance. New business by value jumped 25% and by volume rose 21%, reaching 53,381 financed vehicles** in April 2026** – a clear indication of strong demand for fresh models. Extending the view to the first four months, volumes in the new‑car segment were 16% higher than in the comparable 2025 period.
Key drivers behind the rise
Although the FLA did not attribute the growth to a single factor, the data suggests that consumers are still keen to finance newly‑released models despite a backdrop of higher interest rates and cost‑of‑living pressures. The robust April figures also position the market for a solid second quarter overall.
Used Car Finance: A Slight Decline
In contrast, the used‑car finance market showed a modest contraction. The value of new business in April 2026 was **2% lower** than in April 2025, and volumes fell **3%** month‑on‑month. Over the first four months of 2026, used‑car finance volumes were **2% lower** than the same period a year earlier.
Potential reasons for the slip
The FLA notes that the sector faces lingering challenges – including cost pressures, weaker consumer confidence and the impact of higher borrowing rates – which can dampen appetite for used‑vehicle financing.
Analyst Insight: Geraldine Kilkelly on the Outlook
Geraldine Kilkelly, director of research and chief economist at the FLA, commented: “The consumer car finance market made a positive start to the second quarter of 2026, driven by strong growth in new‑car finance.” She added that “the near‑term backdrop remains challenging, with cost pressures, weak confidence and higher interest rates weighing on activity.” Kilkelly highlighted the recent US‑Iran agreement as a factor that could stabilise energy markets and improve the medium‑term outlook for growth and inflation.
Opportunities on the horizon
Looking forward, Kilkelly identified clear opportunities in the expanding electric‑vehicle (EV) market, both for new and used cars. She emphasised that “FLA members will play a central role in supporting this transition, enabling access to newer, more efficient vehicles and supporting mobility across the UK.”
What This Means for UK Dealers
For car dealers, the divergent trends underscore the importance of a balanced product mix. The surge in new‑car finance suggests that promotional financing schemes for fresh stock could capture eager buyers, while the modest dip in used‑car lending signals a need to reinforce value‑add services and competitive rates to retain interest in second‑hand vehicles.
Dealers that can navigate the higher borrowing costs, offer attractive finance packages for EVs, and maintain strong relationships with finance providers are likely to benefit from the continued growth in the sector.
Where to Find More Insight
- Nominate yourself for a Used Car Award
- Join our breaking news WhatsApp group
- Sign up for daily email Car Dealer news bulletins
- Listen to the latest Car Dealer Podcast
- Read the latest digital issue of Car Dealer Magazine
The post New car finance volumes jump by more than a fifth in April, but used car lending slips appeared first on Car Dealer Magazine.