ACF Car Finance, the used car dealership network of non-prime lender The Funding Corporation, has opened its third retail outlet in south-east England as subprime applications rise in London and the surrounding area, and confirmed plans to open further UK dealerships in the next 18 months.

The 9,000 sq ft dealership will be built in Vector Park in Feltham, the first major suburb into London from Heathrow and along the route from the airport to Chiswick Roundabout and the west-centre of the city. ACF also operates dealerships in Dunstable, on the A5-M1 route from Milton Keynes to north London, and Maidstone, south-east of London along the A20/M20 in Kent.

David Challinor, managing director of Chester-based The Funding Corporation, said the dealership was of "strategic importance" given its proximity to the M25, M3 and M4 and would improve the speed of appointment times in the south-east when added to the sites in Dunstable and Maidstone.

"Prospective buyers are quite prepared to travel up to two hours to visit our showrooms," he said. "The Feltham location means that we can now offer much easier access to ACF Car Finance for customers from countries further west and south-west."

The Funding Corporation and ACF operates a risk-based lending model based on customers arranging subprime finance before viewing a car and Challinor explained their third dealership in the south could be taken as an "indication of how this market is expanding" and the fading cliché of the monetary divide between the north and south of England.

Challinor said the London car finance market experienced a unique combination of the availability of public transport beyond the norm in the UK, which could reduce the need for a car, and the operation of automatic rejections by some non-prime lenders based on applicants’ postcodes.

"A decade ago, London and the south-east were somewhat under-represented by credit-impaired applicants, compared with the rest of the UK," said Challinor. "However, the proportion of applications from London and the home counties is unquestionably growing.
"We chose Feltham after conducting an extensive data analysis and profiling project with Experian, the results of which suggested that the area contained a high proportion of potential customers.

"It provides a resource for non-prime car buyers in south-east London who previously faced longer journeys to our other satellite showrooms."

Challinor explained the capital, taken as a whole, demonstrated subprime applicants did "not conform to a simple social stereotype" and were drawn from "just about every profession and every background".

Although many south-east applicants "can be described as comfortably situated in terms of their earnings and lifestyle," the more stringent requirements of prime lenders since 2008 were funnelling applicants without a "squeaky clean credit history" into subprime.

According to Challinor, many south-east and London applicants were in a similar position to those throughout the UK with long-overcome "blemishes" preventing the acquisition of credit, despite overall healthy money management, but which would be fully considered in the underwriting process.