Insolvent business fall
August 2nd, 2010 by Richard Aucock
CAR industry business failure rates have continued to fall in June 2010 reports information firm Experian.
However, the number of late payments has actually RISEN to the highest point since December 2008.
This is stemming the improving financial health of the car industry, says Experian’s Joe Myers.
‘Although the insolvency rate is much better than this time last year, there’s no doubt poor payment performance in June had an adverse affect on the financial strength of the industry.’
The number of insolvent businesses in June was 31 – a big drop on 2009’s figure of 44. But the number of ‘days late’ after finance payments were due has increased to 17.01 – and that hasn’t been this high since December 2008.
As an indicator of business confidence, this has caused a slight decline in the year-on-year financial strength of the industry.
So, what can car dealers do about this, to help themselves and others? ‘Stay within their payment terms,’ is Myers’ simple answer.
‘This is vital to maintaining a good business credit score and a low risk profile, key factors that help dealers retain their business relationships and lines of credit.’