All articles by Fred Crawley
Fred Crawley
Direct lenders begin to confirm competitive intentions
HP and PCP providers look set to face stiffer competition from direct loan providers in the second half of this year, as the high street begins its return to the car finance market Competitive pressure from direct lenders dropped massively in the wake of the credit crunch, leaving an opportunity for point of sale finance providers to achieve greater penetration into UK car sales
Smaller dealers still committed to finance sales
Contrary to recent concerns expressed by several companies in the broker sector, reports from industry bodies suggest that enthusiasm for selling finance among the UKs smaller dealerships remains as strong as ever. Asked whether the Retail Motor Industry Federation had heard any reports of smaller member dealers decreasing or even cutting their involvement with finance providers, director Sue Robinson said that it was not an issue she had come across.
BMW introduces 50:50 finance offer
BMW Financial Services (BMWFS) has announced a new 50:50 product, which allows customers to pay 50% of a car’s value up front, then absolutely nothing for two years, following which they may either pay the balance to take ownership of the car, part exchange the car for a new one, or hand it back to the dealer
Prices on the rise across dealer finance sector
Retailers report that Carlyle Finance was the first to raise prices but the move became more widespread when market leader Black Horse Motor Finance increased rates by an average of 0.25 flat (0.45% APR) on 9 May. The base rate remains at 0.5% and a range of lenders have reported that their cost of funding has remained stable since spiking earlier in the year in anticipation of bank rate rises.
Lombard backs SMMT
Lombard, the UKs largest asset finance company, is to sponsor the annual dinner of the Society of Motor Manufacturers and Traders (SMMT) on 22 November, as part of a campaign to increase its profile as a lender among UK businesses. While Lombard is a provider of stocking finance to the car retail industry, this is not the primary message the company wants to put across by putting its name behind the SMMT dinner A spokesperson explained that the decision had been made instead to reinforce its position as an asset finance lender to the commercial transportation sector, a role it has filled since it started life as the North Central Wagon Company in 1861.
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Approval rates up in subprime
Increased levels of funding into the non-prime sector have seen finance approval rates climb for brokers, recent statistics have revealed. Louis Rix, director of brokerage Carfinance247, said 26% of non-homeowner applicants were approved for car loans in April, compared to just 15% during the same period last year
Close Motor Finance records rapid growth in H1
Strong new business growth at Close Motor Finance has contributed to a solid interim result for the Close Brothers Group, which reported a pre-tax profit of £55.8m or the first six months of its financial year The groups interim statement said that its banking segment (which incorporates CMF under its retail division) had built its loan book 9% over the six months to reach a total of £3.17bn CMF grew faster than any other part of the banking segment, growing its book by 14% over the period to reach £737m and adding 200 new dealer relationships to its previous roster of 5,800
FLA motor finance statistics
Car finance sales better than expected total value of finance up 1% year-on-year despite number of units financed falling 5%. Marchs monthly statistics will be the last distorted by scrappage, since the scheme came to an end at the end of March 2010. While the total value of used car finance has been up year-on-year for several months, March 2011 saw a drop of 3% compared to the previous year.
Approval rates climb in non-prime
Approval rates for non-prime finance applicants are on the rise due to increased funding in the sector, better decision-making software and greater awareness of credit scoring processes among customers, lenders have reported Louis Rix, director of brokerage Carfinance247, said that 26% of non-homeowner applicants were approved for car loans in April this year, compared to just 15% during the same period last year.
Future of motor finance brokers
Motor Finance brought a number of experts together for a round table to discuss the currentstatus of brokers and to discuss and explore what the future holds for the profession. This month, Motor Finance, in collaboration with Frontline Solutions, invited a collection of point of sale experts to attend the third of 12 round table discussions on the future of the dealer finance market. The following pages highlight the debate and discussions, in which brokers, lenders and independent consultants made clear their feelings and opinions on the important issue of what the future holds for the UKs motor finance brokers.