All articles by Fred Crawley
Fred Crawley
Prices on the rise across dealer finance sector
Retailers report that Carlyle Finance was the first to raise prices but the move became more widespread when market leader Black Horse Motor Finance increased rates by an average of 0.25 flat (0.45% APR) on 9 May. The base rate remains at 0.5% and a range of lenders have reported that their cost of funding has remained stable since spiking earlier in the year in anticipation of bank rate rises.
Lombard backs SMMT
Lombard, the UKs largest asset finance company, is to sponsor the annual dinner of the Society of Motor Manufacturers and Traders (SMMT) on 22 November, as part of a campaign to increase its profile as a lender among UK businesses. While Lombard is a provider of stocking finance to the car retail industry, this is not the primary message the company wants to put across by putting its name behind the SMMT dinner A spokesperson explained that the decision had been made instead to reinforce its position as an asset finance lender to the commercial transportation sector, a role it has filled since it started life as the North Central Wagon Company in 1861.
Approval rates up in subprime
Increased levels of funding into the non-prime sector have seen finance approval rates climb for brokers, recent statistics have revealed. Louis Rix, director of brokerage Carfinance247, said 26% of non-homeowner applicants were approved for car loans in April, compared to just 15% during the same period last year
Close Motor Finance records rapid growth in H1
Strong new business growth at Close Motor Finance has contributed to a solid interim result for the Close Brothers Group, which reported a pre-tax profit of £55.8m or the first six months of its financial year The groups interim statement said that its banking segment (which incorporates CMF under its retail division) had built its loan book 9% over the six months to reach a total of £3.17bn CMF grew faster than any other part of the banking segment, growing its book by 14% over the period to reach £737m and adding 200 new dealer relationships to its previous roster of 5,800
Prices rise across dealer finance sector
May has seen a new benchmark set for pricing in retail motor finance, with dealers across the UK reporting consumer rates up in the region of 0.5% APR While some retailers report that Carlyle Finance was the first to raise prices, the move became more universal when market leader Black Horse Motor Finance increased rates by an average of 0.25 flat (0.45% APR) on 9 May. Many of the non-captive lenders are now understood to have followed suit, although not all have raised prices universally Santander Consumer Finance, for example, is thought to have assessed pricing on a dealer-by-dealer basis.
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Disappointing April for Europe
The UKs new car market fell 7.4% year-on-year in April, outpacing the 3.1% rate of decline in the total European market, according to latest statistics from information provider JATO. Of the big five European markets, only Germany saw an increase in sales in April, up 2.6%, while France, Great Britain, Italy and Spain all experienced decreases, down 11.1%, 7.4%, 2.3% and 23.6% respectively. German brands also saw a continuation of their recent success, with sales of BMW, Audi and Volkswagen all recording positive growth year-to-date, up 3.6%, 3.7%, and 5.1% respectively
Retail finance brokers still need a trade body
Asset and motor finance industry bodies do not currently provide a suitable home for consumer finance brokers, said delegates attending a round table discussion hosted by Motor Finance and Frontline Solutions this month The Finance and Leasing Association, BVRLA and NACFB are all well suited to companies in the fleet sector, but are not real options for consumer motor finance brokers, the attendees argued. Richard Hoggart, managing director of DSG Financial Services, says there is a huge gulf between fleet leasing brokers and retail finance brokers which needs to be recognised by the bodies.
VWFS – Q1 new business up by a fifth
Manufacturing giant Volkswagen achieved 1.7bn (£1.5bn) profit after tax in the years first quarter, more than tripling the figure achieved during the equivalent period in 2010. Revenue for the group rose 31% to 37.5 bn (£33.4 bn), with a record two million vehicles sold in the quarter, 14% more than in Q1 2010. The Volkswagen group’s share of the global passenger car market rose to 12% in the reporting period, from 11.5% last year
Saab RV uplift as Chinese rescue raises hopes
A cash injection from a Chinese benefactor has solidified the reversal of fortune experienced by Swedish brand Saab, boosting analysts expectations of the troubled carmakers residual values in years to come The independent Hawtai Motor Group has provided funding worth 150m (£134m) to save Saab from collapse, receiving in return a 30 percent stake in Spyker, the brands owner Spyker bought Saab out of liquidation from General Motors in January 2010, but has had severe cashflow problems with the brand ever since most recently evident in the halt in production of Saab vehicles that began on 6 April.
BMW finance boom in record quarter
BMW Group has reported a net profit of 1.2 bn euros (£1.01bn) for the first quarter of 2011, up 270% on last years first quarter total of 324m (£290m). The result comes on the back of the carmakers greatest ever Q1 sales performance, with sales of BMW, Rolls-Royce and MINI vehicles up by 21.3% on the period a year before to a total of 382,758 units