Business new car finance rose by 19% in March 2025 compared with the same month last year, according to the latest figures from the Finance & Leasing Association (FLA).

The growth came as part of an overall 11% increase in total asset finance new business, which includes leasing and hire purchase across all asset types.

The March performance, which represented the highest level of new business in March for two years and the second highest monthly total on record, was particularly notable in the vehicle sector.

Businesses have been bringing forward vehicle purchases ahead of the vehicle excise duty increases that came into effect from April 2025.

Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The asset finance market reported its highest level of new business in March for two years and the second highest monthly total on record.

“The recovery in the business new car finance sector was supported by the issue of a new registration plate and customers bringing forward purchases ahead of increases in vehicle excise duty from April 2025.”

Kilkelly added: “March saw a pick-up in new asset finance lending to SMEs which grew by 16% compared with the same month in 2024, while new lending to larger businesses increased by 5%.

“The asset finance market returned a strong performance in Q1 2025 despite a challenging economic environment and greater uncertainty about the outlook.

“Further cuts in interest rates should help those businesses in a position to invest as they focus on driving growth through the use of greener assets and more efficient technology.

“The asset finance industry provides significant support to businesses of all sizes, funding a third of UK investment in vehicles, machinery and equipment in 2024.”