"The car finance market remains under pressure from elevated interest rates and poor perceptions. Lenders need to focus on transparency and building consumer trust."
Utku Tansel - Senior Retail Analyst
The UK Car Finance Market, valued at nearly £39 billion in 2024, has remained flat with a minor increase in value despite decline in new business volumes and faces challenges like elevated interest rates and deep consumer distrust stemming from past mis-selling scandals. Forecasts for the Car Finance Market Size project steady growth, reaching over £48 billion in the foreseeable future, with growth driven primarily by rising car prices and the shift towards electric vehicles expected to play a key role in future expansion.
Personal Contract Purchase (PCP) plans remain the dominant car finance option, especially among younger buyers seeking flexibility and low monthly payments.
While most of the prospective car buyers plan to consider a pure electric vehicle (EV) for their next purchase, petrol and diesel cars still dominate consumer choices, which shapes the Car Finance Market Trends.
61% of consumers are less likely to use car finance in the future due to past mis-selling scandals, while nearly half the consumers distrust car finance providers to act in their best interests.
Digital engagement and personalised finance solutions have opportunities as industry works to rebuild trust, which can shape the Car Finance Market’s future.
The UK Car Finance Market Report 2025 provides valuable insights into the Car Finance Market in the UK, including consumer preferences, financing trends, and the impact of economic factors like rising interest rates and inflation. It examines critical market dynamics, consumer attitudes toward car finance, financing product choices, and future opportunities in electric vehicle financing. The research also explores the detailed analysis of past mis-selling scandals, consumer behaviour and opportunities to address consumer needs for transparency. The Car Finance Market Report will benefit car finance providers, automotive manufacturers, fintech companies, and marketers by offering data-driven strategies to engage consumers, improve customer trust, and help brands gain car finance market share.
| Report Attributes | Details |
|---|---|
| Published Date | September 2025 |
| Data Range | 2019 – 2030 |
| Measurement Metrics | Revenue in £ |
| Country Focus | United Kingdom (UK) |
| Consumer Data | 1,278 internet users aged 18+, May 2025 |
| Number of Pages | 69 |
| Market Segmentation | Personal Contract Purchase (PCP), Hire Purchase (HP), Personal Contract Hire (PCH), Leasing Agreements, Motor Loans, Electric Vehicle Financing |
| Leading Companies | Black Horse, Toyota Financial Services, Paragon Banking Group, Ford Motor Finance, Carmoola, XPENG |
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