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Extended: A quicker way to sub-prime

A finance company has called on motor retailers to take advantage of the potential of the sub-prime finance market as a survey points to the high level of unsecured debt in the UK.

Blue Motor Finance believes it has developed a winning formula for dealers, based on the speedy way applications are handled. But a report by Datamonitor into unsecured debt in Western Europe places the UK at the top of the EU league.

The finance company is seeking sub-prime business through dealers and claims that through its processes ‘delinquency’ is minimized and the £17bn non-prime sector is opened up.

Sub-prime is said to account for the sale of one in 10 used cars.

Blue Motor Finance has attracted the interest of Lookers, which is actively looking for ways of generating revenue outside car sales.

Paul Bentley, Lookers’ group finance and insurance director, says: “We are using Blue Motor Finance exclusively for non-prime business. This is proving beneficial to the group and has created an improved vehicle distribution channel that was not previously fully used.”

Peter Critchley, Blue Motor Finance sales director, says: “Credit-impaired customers often had to accept a car they didn’t want. Our philosophy is to be able to offer them the car they do want at a price they can afford.”

Blue Motor Finance’s approach is based on an innovative, web-based automated scorecard system. This enables F&I business managers and sales teams to receive a response on an application for non-prime finance in less than 15 minutes. This traditionally took dealerships hours, if not days, by which time the potential sale was often lost.

Blue Motor Finance says it analysed thousands of applications. It discovered that a large proportion of non-prime proposals could have been written if the terms had been risk-related and dealt with more efficiently.

Blue Motor Finance says dealers can offer interest rates that are considerably less than the non-prime average.

The Finance & Leasing Association, responding to Datamonitor’s report, says: “The UK is the largest consumer credit market in the EU, and the market has been a key driver of UK economic growth.”

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