The 42-year-old was unseated as Singer & Friedlander’s sales and marketing director in January last year, when the parent merchant bank sold most of its motor loans book to Close Motor Finance.
Citing inadequate margins in a banking group context as the reason to abandon motor finance, S&F declined a management buyout bid led by Roberts. However, the strategy behind that proposal endures in plans to transform Southern Finance into a major national force in the independent F&I sector.
This includes establishing a new base in Bolton to generate full English and Welsh coverage through an initial network of 1,500 retailers and across a more diverse consumer audience. Scotland follows later.
Southern Finance, a subsidiary of the Lenlyn Group, has as its name implies, majored on southern England and “back door” dealer funding of mainly older used cars. It has a customer base of around 11,500.
Roberts explains: “Our MBO plan processed a lot of the same numbers. The strategy paper is much bigger and this is just the first year. After leaving S&F I defined which areas made money and which did not.”
He aims to move the business into predominantly prestige brands via both franchised and independent dealers.
“Captive lenders don’t really understand this clientele, because people with that kind of money are not easy to credit score and assess,” says Roberts.
“Above £25,000 you need more questions asked and human interaction in the underwriting business. We offer a manual, rather than automated, regimented credit-scoring procedure.”
A specialist prestige division, involving former S&F staffers, is being established within the new Bolton centre, formerly operated by Park Finance for whom Roberts worked after S&F’s withdrawal. Southern continues to avoid larger retailer groups, because Roberts “dislikes the ridiculous APR rates war”.
He adds, ironically: “Lending for profit is a novel concept when finance houses beat each other up and no one makes money.”
Cash for car refugees from company car dependency form a major target group.
Roberts argues: “No lender focuses on people opting out of company car schemes. They may have choice, but they need advice to tailor their allowances accordingly.”