Startline Motor Finance has urged motor dealers to rethink their offerings due to changing economic conditions and uncertainty, citing the results of the EU referendum and the changing nature of employment as reasons for a new approach.
Startline reported that 20% of used car customers would be rejected by prime lenders but have a credit profile strong enough to be considered ‘near prime’.
Paul Burgess, chief executive officer of the company, suggested that traditional factors used in credit scoring were no longer fit for purpose due to the shifting nature of financial realities.
Burgess said: “These include the decline in home ownership, the rise in contract and temporary working, and a host of other general changes to people’s overall economic circumstances.”
He also stressed that Brexit related uncertainty could increase the number of customers in these situations, and urged for lender panels to adapt.
He added: “People generally are likely to have less money in their pockets and perhaps face even greater uncertainty over their future employment prospects. Fewer borrowers are likely to meet the requirements of prime lenders.
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“From our own experience as a flexible prime lender, we can very much see that there is an appetite for a more adaptable form of lending among both dealers and their customers.”