Business
launches in UK intent on forging links with franchised
dealerships.
Go deeper with GlobalData
Ferrari Financial Services has launched a
business in the UK and begun forging links with franchised
dealerships, Motor Finance has learned.
The UK office is FFS’ latest venture since setting
up in the US in 2007, and sales are being led by Barry Hyde.
The captive financier already has offices in Italy,
Germany, France, Austria, Belgium, and Switzerland, and enjoys an
average European penetration rate of 45% among Ferrari sales, some
11% up on last year.
If it wants to bring its UK business up to these
levels, however, it has a lot of ground to gain.
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By GlobalDataCurrently, it is understood that FFS is working
only through franchised Ferrari dealers, and concentrating
exclusively on very high-end new vehicles. Its presence has not
been felt significantly if at all in the used market.
Ferrari FS’ UK office declined to comment on the
outlook for the captive, issuing instead the following statement
from its headquarters in Maranello, Italy: “The FFS department in
Maranello is not currently looking to do any further PR activity in
the trade press as their resources are entirely focused on ensuring
the smooth transition to, and implementation of, FFS in the UK
dealer network and other markets where FFS now operates.”
The majority of Ferrari finance in the UK, over and
above that sourced by Ferrari Financial Services, continues to be
arranged by brokers and specialist funders.
Andy Wise, managing director of Fast Car Finance, a
broker specialising in finance for prestige vehicles, said he has
arranged finance for three Ferraris in the last five weeks, among
other deals.
Wise added that business at his end of the market
is picking up enough for him to take on a new member of staff to
work on business development.
Fast Car Finance sources most of its business
through relationships with specialist independent prestige
dealerships. For the Ferrari marque, FCF originates most of its
business through Maidstone-based The Ferrari Centre, the UK’s
largest independent dealer of used Ferraris. It has similar links
with Bentley and Porsche specialists.
FCF specialises in originating funding for
vehicles, mostly used, in the £25,000 to £75,000 range, and prefers
to stay out of the supercar finance market, which Wise said is a
completely different business.
Preferred minimum lend
FFS, by comparison, has a preferred minimum lend of
€120,000 (£102,000) – one factor which may have put it out of
competition with many brokers and independents.
Wise commented that he now introduces more
business-to-business than consumer business in the prestige finance
market, with a rising demand for company cars such as high-end
Audis and Mercedez-Benz vehicles coming from the middle management
ranks of businesses.
This optimism is echoed by dealership group JCT600,
which is currently undergoing a round of growth fuelled by what it
says is a growing British belief in the affordability of prestige
vehicles through finance schemes (see page 14 for more on
JCT).
While FFS does not seem to be in full competition
with brokers and independents yet, due to its focus on the more
exclusive end of the market, questions are being asked over where
it positions itself in terms of rates.
In many cases at present, it seems brokers may be
easily undercutting the FS arms of prestige marques. One source
mentioned that he had seen deals done with the FS arms of
Mercedez-Benz and Porsche at rates of between 12% and 13%.
By comparison, Wise at FCF said that deals he
introduces are usually written at 9%.
Most of FCF’s deals are with Santander’s consumer
division, which currently leads the market in terms of
business-to-consumer prestige vehicle finance. Santander is known
to be particularly dependable for financing vehicles from new up to
five years of age.
Other lenders, however, especially when dealing
with proposals for vehicles over 8-10 years of age, seem to have
scarcer appetites.
Lombard, once a very active player in the sector,
has been closed to virtually anyone but RBS group customers for the
last 18 months, while ING Car Lease seems to have focused its
appetite in the prestige sphere to new fleet vehicles sold from
franchised dealerships.
Good funder
Close Motor Finance remains as a good funder in
this part of the market, but charges considerable premiums in
accordance with the wider Close Brothers group’s risk pricing
strategy.
One interesting lender which has come to specialise
in prestige finance is Liberty Leasing, a relatively small South
Coast finance house that takes a lot of business from brokers that
has fallen just below the credit scoring threshold of the high-end
captives.
Due to its status as the second port of call
after the stringent underwriting of the prestige FS arms, Liberty
takes an individual view on each deal it approaches, deciding on
the terms of lending and the proportion of value to be lent on a
customer-by-customer basis. It regularly lends in the
£250,000-300,000 range.
