The Bank of England has told banks to set aside an extra £11.4 billion to protect the economy from a financial crash as car finance and credit card debt lending continues to “increases rapidly”.
Used car PCPs could play a crucial role in maintaining demand for diesel cars if the current backlash against the fuel type continues, according to iVendi.
There has been a lot of adverse publicity around Personal Contract Purchase in recent months, much of which is technically incorrect and some of which is blatant journalistic sensationalism.
Prepared car dealers can minimise risks to the finance market – whether from competitors, regulation or market pressures.
The new car sales boom depends on cheap, available finance, but storm clouds are visible on the horizon.
To dispel doubt about the stability of the motor finance market, finance houses and trade bodies need to be more transparent.
New car registrations fell 19.8% to 152,076 units in April, blamed on the Vehicle Excise Duty (VED) changes, but year-to-date performance still at record levels.
The PCP industry is booming. Thousands of drivers every year walk off the showroom forecourt with a brand new motor and a freshly signed PCP agreement to go along with it.
An investigation into finance in the automotive sector has slammed used car dealers for a “£1.4 billion a year rip-off” after comparing the deals offered by 100 retailers across the UK.
FCA action to tackle perceived “conflicts of interest and irresponsible lending” in motor finance must be proportionate and not harm vehicle sales, according to NFDA director Sue Robinson.
The Bank of England has confirmed that it considering more stringent regulations which would usher in strict affordability checks in a bid to avoid a PCP-prompted financial crisis.
PCP deals dominated the plate-change month of March with 47.6% of new car buyers and 25.4% of used car buyers opting for the popular finance option.
The voluntary termination of personal contract purchase (PCP) and hire purchase agreements (HP) are at an all-time high, according to G3 Remarketing.
The used car market is showing no signs of cooling down despite the high volume of PCP cars coming back into dealers as part exchanges, according to the Aston Barclay Group.
Suzuki, Nissan and Dacia continue to maintain the lowest monthly prices for car finance offers in Q1.
Industry commentators fear combination of sub-prime lending, currency fluctuations and Brexit could prompt a fall in residual values.
The best used car stock is now largely being sold online in a ready-to-retail condition to dealers.
The point-of-sale consumer used car finance market grew 12% by value and 9% by volume in October, compared with the same month last year, according to The Finance and Leasing Association.
Glass’s has predicted that the falling value of the pound is likely to see monthly PCP new car payments rise in 2017 as manufacturers look to recoup their losses.
The appeal of the PCP is central to a range of new finance products which have now been made available for the McLaren Sports Series through McLaren Financial Services.
