Finance market plunges
April 27th, 2009 by Richard Aucock
FINANCE for UK retail cars has fallen by nearly 60 percent in just five years, reveal new findings.
Trend Tracker has discovered the dramatic decline has been led by direct lending, which has plunged much faster than dealer finance.
In its annual UK retail car finance market study, the organisation has discovered that £22.8 billion was wiped from the total UK retail car finance market between 2003 and 2008.
Indeed, the market is so weak, some banks are considering pulling out from it altogether.
It’s those direct lenders that have been particularly badly hit by the collapse of credit markets. While Point Of Sale finance has dropped by a quarter, sales of secure and unsecured loans dropped by a staggering 60 percent.
Increasing the likelihood of some banks selling off their automotive finance departments altogether.
While the findings of the report are less startling for dealer and manufacturer finance schemes, it is still not helping car dealers’ cause. Trend Tracker has found that, in the last five years, 19 percent of franchised dealer sites closed.
In the NEXT five years, another 21 percent are expected to close.
Furthermore, while the retail car finance market will improve by just under 40 percent in the next five years, this is still well down on 2003 levels.
‘New car and finance demand could take as long as 12 years to recover,’ said a spokesman.
Not the sort of report to cheer us up on a busy Monday morning…