Thursday, February 3, 2011

Dreaming of the Fast Lane: UK Motor Finance 2010


Dreaming of the Fast Lane: UK Motor Finance 2010

The motor finance market was in decline up to 2006. However, lending volumes soared in 2007 in both new and used car finance and have started to decline since then but have outperformed the overall consumer credit market. The dynamic between risk and reward has shifted with finance houses looking to build stronger relationships with dealers as the market has become smaller.
Scope
*Illustrates the performance of new and used car sales, both at the overall level and broken down into the different types of motor finance product.
*Gives an insight into the market penetration for motor finance products among consumers using Datamonitor’s proprietary Retail Banking Survey.
*Provides forecasts for new and used motor finance over the next five years, with a consideration of the likely prevailing economic conditions.
Highlights
Gross lending in the motor finance market grew in 2007 and 2008, arresting the decline seen over the previous few years. Despite the fall in 2009, motor finance has increased its share of the overall consumer credit market during the past few years from around 5.5% in 2004 to 6.6% in 2009.
The UK motor finance market can be split into two main groups of players, the independent players and the captive finance houses. The major independent players are Black Horse and Santander. However, it is the captive finance houses such as Ford Finance and Volkswagen Finance that dominate the motor finance market.
Regulation is an important factor in the motor finance market. Previous consumer finance regulatory measures have had an impact on the costs incurred by finance houses as they look to ensure that they comply with all the latest requirements. The Consumer Credit Directive will have a further impact when it is fully implemented in 2011.
Reasons to Purchase
*Enables finance houses to see how their competitors are doing and gauge their overall performance in terms of gross lending and balances outstanding.
*Builds up a profile of the typical motor finance user to allow finance houses to get a better idea of who they should be targeting.
*Provides forecasts for new and used motor finance over the next five years.
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