The missing links
Things don’t get any easier for us
brokers, I am sad to say. Times were already getting tough at the
start of this year as lenders seemed to be running low on funds to
lend resulting in fewer acceptances. This meant we had to up the
game to get in more proposals, simply to stand still.
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In the meantime manufacturer lead times started to
extend, in some cases ridiculously. However, this wasn’t
necessarily the fault of the manufacturers. I was quite scathing
about them at the time, suggesting that they couldn’t organise a
drunken party [eh? You mean a piss-up? – Ed.] in a brewery
but it turned out to be the fault of the second- and third-level
component suppliers, who were dropping like flies.
As one pointed out to me, there is no point in
having cars built only to sit in a field waiting for missing light
assemblies or rear wash-wipe assemblies to be fitted before they
can be sent out. Especially as they had no-one manufacturing the
parts to make the assemblies as the suppliers had gone bust.
Even though Mandy didn’t fulfil his promise to
support the vehicle finance sector, we started to see light at the
end of the tunnel. Used car prices were increasing, putting the
lenders back into profit and allowing a few lenders to become a
little bullish with rates.
Cars even started to appear in dealer stock. All
was starting to look a little rosier. Then came the body blow to
many brokers: the sudden, and in some cases unexpected, withdrawal
of the lenders from the broker market. Not just one, but
several.
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By GlobalDataIt is a mystery
Why should this be? I couldn’t work this
out when it happened in the last recession and still can’t in this
one. Broker business is free business – the customer pays.
I could understand culling a few dodgy ‘creative’
brokers, or rewriting the application requirements such as bank
statements and pay slips being requested with personal
applications, or bank statements and management accounts requested
with business applications. But to simply turn their backs on
brokers seems suicidal to me – unless, as suggested at the
beginning of this piece, lenders are still short of money as the
banks continue to shore up balance sheets.
As one funder explained in the last recession, when
the same happened, their in-house staff cost a lot to recruit and
train, so why throw that away at the expense of brokers who you
could get back by simply offering a few good deals?
He probably has a point, assuming there are still
brokers out there at the end of this current recession. There may
be a few bucket shop operations still going but many old
professional brokers have already gone and many more are on the
brink.
