The UK motor finance market continued to grow during the first half of 2026, with lenders providing £22.7 billion to households buying new and used cars, according to new industry figures.

Data from the Finance & Leasing Association (FLA) shows its members provided £84.3 billion of new lending between January and June 2026.[1]. This was 5% higher than during the same period last year. Motor finance represented almost 27% of that total.

The figures show continued demand for vehicle finance despite the wider industry facing significant scrutiny over historic commission arrangements and the ongoing car finance scandal.

Motor Finance Lending Rises 13% in June

Growth accelerated towards the end of the first half of the year.

Motor finance lenders provided £5.19 billion of new lending during June alone. This represented a 13% increase compared with June 2025 [2].

Across the second quarter, motor finance lending reached £14.35 billion. This was 10% higher than the corresponding period last year.

The longer term figures also point towards continued growth. Motor finance lending reached £56.75 billion during the 12 months to the end of June, representing an annual increase of 7%.

The performance made motor finance one of the stronger areas of lending during June.

Households Continue to Rely on Finance

The figures demonstrate the important role finance continues to play in the UK vehicle market.

Households received £63.3 billion in finance from FLA members during the first six months of 2026. More than a third of that amount was used to finance new and used vehicle purchases.

FLA Chief Executive Shanika Amarasekara said access to competitive and responsible finance remained important for households making major purchases and for businesses investing in future growth [3].

The latest figures also coincide with growth in the wider new car market. UK new car registrations increased by 11.7% year on year in July, with 156,571 vehicles registered. Demand for electric vehicles was particularly strong.

Growth Comes During Scrutiny of Historic Motor Finance

The strong lending figures come at an unusual time for the sector.

While consumers continue to use motor finance for current vehicle purchases, lenders are also dealing with complaints concerning agreements made in previous years.

The Financial Conduct Authority's work on historic motor finance commission arrangements has led millions of consumers to consider whether they could have been affected by car finance mis-selling.

This distinction is important. Growth in new lending does not relate directly to whether someone has a valid car finance claim concerning an older agreement.

Today's motor finance market operates under rules that have changed significantly since many of the agreements at the centre of the current mis-sold car finance scandal were entered into.

What About PCP Finance?

Personal Contract Purchase remains a familiar way for consumers to finance vehicles.

Drivers considering PCP claims or a PCP refund should therefore distinguish between taking out PCP finance today and concerns relating to historic commission arrangements.

A potential PCP claim generally concerns how an earlier agreement was arranged and whether relevant information about commission was properly disclosed. It does not mean that PCP finance itself has been found to be inherently unsuitable for consumers.

Similarly, motorists investigating mis-sold PCP car finance should consider the circumstances of their individual agreement rather than assume that every historic PCP agreement will qualify for compensation.

What Does Market Growth Mean for Car Finance Claims?

The latest FLA figures do not change the position for consumers pursuing car finance claims or waiting for further developments concerning the FCA's compensation scheme.

They instead provide a snapshot of the current health and scale of the motor finance market.

For consumers considering car finance compensation, the relevant questions continue to relate to their historic agreement and whether it falls within the scope of the FCA car finance redress rules.

The same applies to PCP finance claims. Eligibility for any compensation will depend on the circumstances of the individual agreement rather than current lending volumes.

Motor Finance Remains a Major Part of UK Consumer Lending

Despite the regulatory and legal uncertainty surrounding historic agreements, the latest figures suggest demand for vehicle finance remains resilient.

Almost £23 billion was provided for new and used vehicle purchases during the first six months of 2026 alone. June also recorded double digit annual growth in motor finance lending.

The FLA's latest industry outlook provides further evidence of that resilience. Almost two thirds of finance companies surveyed expected new business volumes to increase during the following 12 months, despite concerns about the wider economy and regulatory environment.

For the motor finance industry, the challenge will be maintaining that momentum while lenders continue addressing the legacy of historic commission practices.

For consumers, the distinction remains equally important. The continuing growth of today's motor finance market does not resolve questions surrounding older agreements or determine whether an individual may be entitled to car finance refund or car finance compensation.

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References:

1. Data from the Finance & Leasing Association (FLA) shows its members provided £84.3 billion of new lending between January and June 2026 - https://cardealermagazine.co.uk/motor-finance-growth-continues-as-lenders-support-22-7bn-of-new-and-used-car-purchases/326258
2. Motor finance lenders provided £5.19 billion of new lending during June alone. This represented a 13% increase compared with June 2025 - https://www.business-money.com/announcements/fla-members-provide-84bn-of-finance-to-support-uk-investment-and-growth/
3. FLA Chief Executive Shanika Amarasekara said access to competitive and responsible finance remained important for households making major purchases and for businesses investing in future growth - https://fla.org.uk/news/fla-members-provide-84-billion-of-finance-to-support-uk-investment-and-growth/