UK Motor Finance Hits £22.7bn in First Half of 2026
💡 Key Takeaway
FLA data shows UK motor finance lending reached £22.7bn in H1 2026, with June up 13%. Here's what the lending surge means for car buyers.
New figures from the Finance & Leasing Association (FLA), published on 6 August 2026, show just how much of Britain's car market now runs on finance — and the numbers are climbing fast. 📈
FLA members provided £22.7bn of motor finance to households in the first six months of 2026, funding new and used car purchases across the country.
That's nearly 27% of the FLA's total £84.3bn of new lending in H1 — a figure itself up 5% year on year.
The headline numbers
Breaking the half-year down shows the momentum building rather than fading:
- H1 2026 motor finance: £22.7bn to households
- Q2 2026 alone: £14.35bn, up 10% year on year
- June 2026: £5.19bn, up 13% on June 2025
- Rolling 12 months: £56.75bn, up 7%
June being the strongest growth month of the half is the detail worth noticing. The market didn't just have a good start to the year — it accelerated into the summer.
New car finance is doing the heavy lifting
Dig into the FLA's monthly consumer data and a clear split appears between new and used.
In May 2026, the consumer new car finance market reported new business up 16% by volume and 18% by value against May 2025. Roughly a quarter of all that new business was funding battery electric vehicles. ⚡
The consumer used car finance market went the other way — down 5% by both volume and value in the same month, with volumes across the first five months of 2026 running 3% below 2025.
Overall consumer car finance volumes grew just 1% in May, with value up 5%. The gap between those two numbers tells you the story: fewer deals, bigger tickets.
Why new is beating used right now
Three forces are pulling in the same direction.
Manufacturer subvention. Carmakers chasing ZEV Mandate targets are pouring money into subsidised finance — 0% APR PCP deals and hefty deposit contributions have become normal on EVs and plug-in hybrids.
The EV effect. With BEVs at a record 27.5% share of July's new car registrations and manufacturers absorbing large discounts, a new electric car on a supported PCP can genuinely undercut what a comparable used one costs to finance.
Used supply. The tight new-car years of 2020–2022 left a thinner pool of three-to-four-year-old stock feeding today's used forecourts, keeping quality used prices firm.
What this means if you're buying
A lending market growing at this pace is, broadly, good news for buyers. 💷
Lenders are competing. Volume growth means appetite. Appetite means more approvals and sharper rates for borrowers who present well.
New-car deals are unusually strong. If you've defaulted to buying used for years, it's genuinely worth pricing a subvented new PCP alongside it. The monthly gap is narrower than most people assume.
But the average deal is getting bigger. Value rising faster than volume means people are borrowing more per car. That's fine if it reflects a better vehicle — less fine if it reflects a longer term stretched to hit a monthly number.
💡 A quick sanity check: work out the total charge for credit on any quote, not just the monthly payment. A 60-month deal at a low headline rate can still cost more overall than a shorter one.
The rate backdrop
None of this is happening because borrowing got cheap. The Bank of England held Base Rate at 3.75% on 29 July, with three MPC members voting to raise it.
Motor finance APRs have stayed relatively sticky. What's changed is manufacturer support and lender competition, not the underlying cost of money — which is exactly why shopping the market matters more than usual right now.
The takeaway
£22.7bn in six months, with June up 13%, confirms a motor finance market with real confidence behind it. Lenders are lending, manufacturers are subsidising, and the new car side of the market is where the sharpest deals sit today.
If you're weighing up a purchase this side of the September plate change, it's a strong moment to look properly. We Finance Your Asset works with drivers in Reading, Berkshire and across the UK to compare lenders and find the structure that actually suits the budget — not just the one on the showroom poster. 🚗