The sub-prime motor finance provider British Credit Trust has
“severely curtailed” its new business, in response to “credit risks
and new strategy”, said chief executive John Sinclair.
A broker, who did not wish to be named, said: “BCT says it is
out of the lending market temporarily but will be back through
selected brokers in January sometime. It is no secret that BCT,
like other funders, has liquidity problems and is negotiating new
lines of inward funding.
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“This is a problem for those few remaining specialist sub-prime
brokers. The sub-prime broker community is very weak and many have
ceased trading in the last quarter. I suspect that come early
January many will close. There are insufficient sub-prime funders
in the market to sustain viable car sub-prime brokers,” the broker
commented.
The temporary pulling-back of BCT will add to the troubles
dealers face when trying to place non-prime and sub-prime
customers. “Given that 20 to 25 per cent of UK adults are credit
damaged, this means that dealerships are unable to sell cars to a
quarter of their showroom traffic. Used car hyper sites and small
older used car dealers will be hardest hit, as they see most of the
sub-prime clientele – possibly as many as 40 per cent of their
customers are in this category,” the broker added.
