In this update we bring you the latest news from Creditplus, and the car finance industry as a whole.
The first quarter of 2014 has been both a positive one for Creditplus and the car finance industry as a whole, with the new and used car market having significantly grown by over 25%.
A combination of manufacturer finance, good high street rates and comparison services mean this sector will continue to grow with over £35 billion having already been lent this year.
Liquidity has clearly returned to the marketplace with the UK job market showing improved figures and CPI (Consumer Price Inflation) sitting at 1.6%. This creates a very positive outlook for providers of car finance.
Lenders in the car loans space are all seeing their bad debt provision perform better.
Bad debt reached a high level for certain non-prime lenders in 2009 and 2010 as they made the decision to reduce their risk profile in return for more business written. However, the credit crunch forced consumers to look after their loans better and most prime lenders are seeing bad debt below 2% whilst non prime lenders are currently seeing between 4-9% depending on the risk profile of the lending book.
This year we have seen various prime lenders all review their risk profiles to now only lend to consumers with a clear credit record, confident in ignoring old or previous debt outside this period, we are also seeing lenders take a view on “Out of character” events on an individuals credit profile, such instances like divorce or job loss that may as a one off have impacted and lowered their credit score.
The first quarter of 2014 has also been a good one for Creditplus in terms of Car Supply (the cars that we source and supply ourselves as part of our armchair solution). We have seen a substantial growth over the last 12 months, however due to this significant growth we expect 2015 to tail off slightly.
Another highlight for both Creditplus and the car finance industry is the introduction of E-Signature – the form by which consumers can sign documents electronically). This procedure has been unveiled in other areas of consumer finance, such as white goods, and is now starting to emerge in the world of car finance.
This will add a huge enhancement to those using internet providers with the speed and security of returning documentation.
The opening quarter of 2014 has been a fantastic few months in terms of financial growth. The industry is going from strength to strength and with the attractive finance rates available to consumers there doesn’t appear to be any signs of it slowing down any time soon. With the launch of new and exciting tools into the marketplace 2014 is looking to be a very exciting year for Creditplus.
If reading this update has got you thinking positively about the car finance market and some of the attractive car finance deals available, why not give one our friendly and knowledgeable customer advisors a call on 0800 1777 290 to discuss your requirements.