Consumer Appetite for Car Finance in 2025: Is it Changing?

Car finance has long underpinned the UK automotive market for both new and used cars. PCP, HP, and leasing options have helped millions of drivers get behind the wheel of vehicles that could otherwise have been unaffordable. Heading into 2025, changing economic pressures, new consumer habits, and the rise of digital-first finance are reshaping how buyers think about funding their next vehicle. 

So, is demand for car finance slowing, growing, or just evolving? Here’s what the numbers and trends tell us. 

The Current State of Car Finance 

Finance still dominates car sales in the UK. Around 90% of new cars and 64% of used vehicles are purchased with some form of finance.

PCP remains the most popular route, making up roughly 55% of all financed vehicles. At the same time, leasing and subscription models are gaining traction, appealing to buyers who value flexibility and lower upfront costs. 

Even with economic uncertainty, the market is showing resilience. In March 2025, new car loans hit £5.15 billion, an 18% rise year-on-year, showing that buyers are still willing to finance their vehicles when options are clear and affordable. 

Shifting Priorities in 2025 

Affordability pressures aren’t turning people away from finance—they’re changing how buyers approach it. Subscription-style products, shorter-term leases, and flexible repayment plans are becoming more attractive, particularly for electric vehicles, where resale values and battery longevity remain concerns. 

Regulatory changes, like the FCA’s Consumer Duty, are also influencing decisions. Buyers now expect increased transparency and fairer terms. Dealers who can clearly explain products and guide customers through finance options often find this reassurance actually encourages engagement rather than deterring it. 

The Digital Finance Revolution 

How buyers want to arrange finance is evolving, too. Many now want to see options while browsing online, not just in person. Younger buyers are increasingly comfortable completing applications digitally, meaning by the time they visit a dealership, their finance decision may already be made. 

Pre-approvals, instant eligibility checks, and comparison tools give customers confidence before they even step onto a forecourt. This functionality and more are available to you on DealTrak, the UK’s leading F&I platform for car showrooms.  

What This Means for Dealers and Lenders 

Car finance isn’t going away—it’s evolving. Dealers who limit themselves to traditional, face-to-face processes risk missing out. Those embracing digital tools, offering flexible finance options, and making transparency a priority will be best placed to meet changing consumer expectations. 

The bottom line? The appetite for car finance remains strong, but the way customers approach it is shifting. Rising costs, new products, digital-first journeys, and regulatory changes are all shaping the market in 2025. For dealers and lenders, the focus should be on matching finance options to today’s buyers’ priorities rather than simply pushing traditional models.