Subprime finance and motor retail group ACF Car Finance is on a
major drive to generate finance leads from third parties as the
volume of deals underwritten by the company hit a “10-year high”
last month.
The proportion of approved deals sourced from
dealers, brokers and other lenders has increased by 8% over the
last two years and now makes up more than 60% of the total, with
the remainder largely made up of business sourced online, according
to an ACF spokeswoman.
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The proportion of introduced deals being
approved is also increasing. Following a change to underwriting
policy in mid-2011, ACF has seen consistent increases in approval
rate for intermediary business, which has peaked at 35% on average
over the last three months.
Last month, a
survey by Motor Finance magazine showed the average
approval rate across UK independent motor finance providers was now
hitting around 50%. Among lenders identifying as primarily
subprime however, only one company reported a higher approval rate
than ACF.
Lenders, dealers and brokers who refer
declined customers to ACF Car Finance earn an average commission of
£300 per sale. ACF expects a ‘record number’ of intermediary deals
to be struck in the coming months and has published a new guide for
its introducer programme, which includes training, service and
marketing assistance.
The news follows a year in which
several subprime lenders have spoken not only of increased
business in the non-prime market but the public acceptance of
subprime as a way of funding car purchases.
fred.crawley@vrlfinancialnews.com
