Motor finance brokers Mann Island Finance, DSG Financial Services and Car Loan 4U have been busy this month, targeting a finance tool at customers on the edge of prime, separating regional business, and appointing a non-executive director, respectively.
Mann Island launched DealingRoom, a finance software package to help dealers catch car sales which may otherwise drop into non-prime. The service matches car customers who receive a termed acceptance from a dealer proposal with the appropriate products from lenders, and overlay a dealer’s stock to find a sale.
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Such a proposition, Mann Island hopes, will place finance for this increasing area of custom while minimising underwriting and credit searches, thus avoiding pushing the customer further into non-prime finance.
Since the credit crisis, the tightened lending of several financers has seen a growth in both the pool of near-prime customers and the acceptance of proposals on amended terms. In March 2012 David Nield, director of lending at subprime car and retail financer Moneyway, spoke of the frustration felt by dealers over declined finance proposals forfeiting sales, particularly when "terms on acceptance don’t allow them to do the deal", while prime and non-prime lenders at a Motor Finance round table (see: A best practice to underwriting, MF 91, May 2012) pointed to an increased level of underwriting to make a deal successful.
Rather than the typical dealer finance model of matching customer details with a chosen vehicle, Mann Island is aiming to increase sales to "credit challenged" consumers by presenting dealers using DealingRoom with the alternative of matching the customer to one of 62 different finance company products. The software will assess a consumer’s viability to meet criteria of lenders on the system, cross-referenced with vehicles the dealer has available, and give dealers the opportunity to present a range of substitute vehicles for which the customer has finance approved and available without additional deposit.
John Hughes, director of the Liverpool-based intermediary, noted the DealingRoom product would not have been possible without the company’s "access to a wide portfolio of lenders and products".
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By GlobalDataThe move echoes Hughes’s previous comments on the "dealer dedication" at the broker without moving toward "rate-for-risk" sub-markets. "Scale is on our side," Hughes explained last year (see: Differing approaches in the Broker Triangle, MF 95, September 2012). "We can provide more choice, that’s our major strength."
High road taken at DSG
The Glasgow branch of DSG Financial Services has been made an independent business by the Stockport-based car finance broker. DSG Financial Services Scotland Ltd, operating from the Strathclyde Business Park, will be headed by David Quate, who has spent the previous three years as DSG’s regional development manager in Scotland.
Richard Hoggart, managing director of DSG, said: "We are delighted to formalise the Scottish operation into a standalone business. David Quate has led the way in making the branch the success it has become. He fully deserves the position of managing director."
Quate, who worked for Bank of Scotland Dealer Finance for 12 years, said: "I have thoroughly enjoyed working with DSG since the launch in Scotland. This new independence allows me to focus more on the needs of the Scottish dealer network, but continue to leverage off the strengths of the English network."
DSG began operations in Scotland in early 2010 when it opened a branch at Belshill, south of Glasgow, with eight staff and ambitions to write between 2,500 and 3,000 contracts in its first year. Although using DSG’s central accounting function in Stockport, the division was already self-sufficient in all other aspects of business, having been formed from a previous partnership with another broker north of the border.
Law and EVs at Car Loan 4U
Web-led broker Car Loan 4U has appointed Richard Law as a non-executive director, capping a busy opening to 2013 during which the company has surveyed the public on the use of electric vehicles (EVs) and public transport, among other topics, launched a smartphone application and become the most-visited car finance broker online this year according to Experian Hitwise.
Law’s role will be to facilitate the company’s growth ambitions in the UK used-car loan market, which it estimates to be worth £7bn a year. Law, who spent the past year as a consultant at the intermediary and is also chief executive officer of identity verification company GB Group, said Car Loan 4U "disrupts the current approach of lending in dealerships".
Following public polls which found 71% of respondents used a car rather than public transport out of convenience, and that only 31% wanted an increase in the national speed limit to 80mph, 64% of the 2,000 people surveyed in March by Redshift Research on behalf of Car Loan 4U said finding a charge point was their biggest worry about owning an EV.
Additionally, 50% would be put off buying an EV by the thought of having to charge such a car several times on long journeys and 45% worried charge times for EVs are too long.
James Wilkinson, managing director of Car Loan 4U, said: "It seems that despite the government’s best intentions to encourage more UK motorists to purchase an electric car, we aren’t quite ready to embrace the idea as a nation."
richard.brown@timetric.com
