All articles by Fred Crawley
Fred Crawley
Editor’s letter: Industry still under the weather
Latest forecasts from the Bank of England seem to be giving some fairly stark messages to the motor finance industry. First of all, inflation rates are double their target at 4 percent, and look likely to remain there for the rest of the year at least, before sinking gradually down to 2 percent sometime thereafter. This will admittedly increase the price of cars, which in turn will mean larger volumes of finance per deal deals and more profit made over the course of agreements.
MIB scheme to ensure asset satety for lenders
Motor Finance providers have been offered a free service to prepare them for Continuous Insurance Enforcement regulations coming into play this spring, as a result of a new tie-up between the Finance and Leasing Association (FLA) and the Motor Insurers Bureau (MIB). Paul Harrison, the FLAs Head of Motor Finance, said: The partnership between motor lenders and MIB is well timed because the new Continuous Insurance Enforcement regulations will require all vehicles to have insurance, even if they are not being used on the road.By working with the Bureau, lenders can protect their assets at the same time as keeping our roads safer.
Cost of funds rising ahead of bank rate
Funding costs for motor finance providers are on the rise, as markets are bracing themselves for interest rate rises over the coming months. Last weeks Bank of England inflation report revealed consumer price inflation to have risen to four percent in January, with a further rise to five percent or more possible before the end of the year. Bank governor Mervyn King has insisted that reactionary bank rate increases are not a certainty, but this has not stopped markets pricing in anticipation of a 1.25 percent rate.
Close hires Irish growth gurus
The figures behind the establishment of some of Irelands largest motor finance providers have been chosen by Close Motor Finance (CMF) to build a presence for the lender in the Republic, through new joint venture First Auto Finance (FAF).
Black Horse to sell bonds
Lloyds Banking Group is to sell bonds backed by Black Horse Motor Finance loans, in the latest sign that UK retail motor paper may be seen as a strong asset by capital markets.
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Hitachi acquires NVR in a bid to increase UK presence
Hitachi Capital, of which HCVS is a subsidiary, has embarked on a major push to increase its UK presence, powered by increased funding commitment from its Japanese parent. The fleet acquisition has accompanied a spate of hires and new business lines within the groups general asset finance division, Hitachi Capital Business Finance, while HCVS has implied it is looking at more acquisitions in the near future.
Captives picking up the slack
As it announces its entrance into the Irish retail motor finance arena, RCI Banque has become the latest in a series of captive finance companies to elbow their way into a limited market at a time when banks and traditional credit providers seem less keen to lend.
HPI wins Duncton contract
Vehicle information provider HPI has signed a new partnership with car finance provider Duncton to deliver vehicle information for use during the assessment of finance applications.Under the agreement, HPI has developed a system to provide vehicle information at the point of application, in order to eliminate data capture errors and ensure the right car is being financed
Tusker: 2011 is year for contract hire
The VAT rise is likely to encourage fleet operators to switch from outright purchase to contract hire, says leasing and salary sacrifice specialist Tusker.The rise will increase the attraction of contract hire, the firm says, as fleet operators can reclaim 50% of the VAT on the finance element of their monthly rentals and 100% of any maintenance element
ITC fends off complaints
ITC Compliance is providing free software to motor dealers who want to ensure they comply with the new Consumer Credit Directive which comes into force at the end of this month.The software provides dealers with an audit trail that should safeguard them against malicious complaints