has withdrawn from UK auto lending, it announced.
The decision was taken in mid-March.
A spokesperson for Paragon Car Finance, part of the Paragon
Group, said: “As part of a restructuring programme, Paragon Car
Finance is withdrawing from the car finance market.
Go deeper with GlobalData
“This has been a very difficult decision for the group to make;
however, the ongoing lack of liquidity in financial markets, allied
with reduced activity in consumer finance spending, have been the
main drivers of this decision.”
The spokesperson added that Paragon has “no plans to re-enter
the car finance market at this time”, but that the company will
“continue to manage the existing assets and will continue to review
any opportunities.”
Paragon Car Finance did not cater to the non-prime market, and
its demise is perhaps an indication that thinning margins in the
prime motor finance sector are causing headaches for lenders.
Staff cuts on the menu
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Solihull-based Paragon Group, which describes itself as “the
UK’s most prolific issuer in terms of the number of transactions
[of securitisations]”, is perhaps better known for its focus on
mortgages for buy-to-let landlords.
The group launched Auto Finance Direct, which was later
rebranded to Paragon Car Finance, in 1996. It started selling its
new and used car finance products through motor dealers in
1997.
Seven positions at Paragon Car Finance have been made redundant,
the spokesperson confirmed, with six administrative staff and one
salesperson to lose their jobs.
Elsewhere within Paragon, the group’s mortgage lending division
began shedding staff in November 2007, with further redundancies
announced in March. In all, Paragon is to lose 30 per cent of its
staff.
In its latest pre-close trading update, for the six months to
March 31 2008, Paragon announced that results were “expected to be
in line with management’s expectations”, with operating profits
predicted to be marginally lower than the comparable period a year
ago, with “marginally higher” impairments in the Consumer Finance
division.
Motor Finance Issue: 43 – May 08
by Jo Tacon ,
Published for the web: May 23 08 16:3
Last Updated: May 23 08 16:4
