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Welcome squeeze aids ACF

ACF Car Finance, which sells used cars as well as providing retail loans, is in bullish mood after last year’s rebranding.

Norman Beaumont, sales and marketing director, said: “We continue to prosper as more used car and sub-prime finance competitors reduce business volumes or cease to trade altogether.”

Despite economic pressures on consumers, demand for quality used cars and tailored finance remained positive and ACF Car Finance was increasing its share of a growing market.

Welcome Finance Services, a sub-prime rival, and its parent Cattles plc has been weakened by the credit squeeze. Cattles is cutting its loans this year to £250 million, a quarter of its 2008 total, and is shifting advances away from cars to shorter-term loans to generate cash more quickly.

Beaumont said an advantage for ACF was being part of the privately-owned The Funding Corporation which made it easier to source finance for retail loans.

“Welcome Finance Services’ decision to withdraw from the third party HP market last April has had a profound effect. Little did we realise at the time how beneficial this decision was to be for us,” he said.

In January ACF reported that its Chester customer
call centre had processed a record 350 applications in one day.

Beaumont said: “The business focus is on driving
quality rather than volume.”

ACF Car Finance’s eight branches (Leeds, Manchester, Nottingham, Birmingham, Bristol, Dunstable, Isleworth and Maidstone) sell used cars, but most loans are made via the call centre.

“The recession has driven more and higher-quality
customers into our marketplace as traditional sources of credit have become much more selective,” said Beaumont. “This is allowing us to be more selective.

“There is a strong likelihood the number of used retail cars with less focus on quality preparation could enter the market. We wouldn’t want to be associated with that – we have considered it prudent to tighten our lending criteria.”

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