The past few years have been filled with uncertainty.
And with record-breaking inflation, the cost-of-living crisis, the semiconductor crisis, a war in Europe unlike anything seen since the 1940s and lockdowns because of the pandemic, the economic outlook for the next few years is even more uncertain.
As a result of the semiconductor crisis, there has been a scarcity of new cars on the market, which has increased valuations across both the new and used markets.
Consumer demand for new and used vehicles has also led to some record-breaking years in terms of turnover and profit for many in the trade.
However, there are already reports that consumer demand is declining.
It is true that some car valuations have started to drop slightly, and although I do not wish to be negative, we have some tough and difficult times ahead of us.
As banks and lenders typically become risk-averse during tough economic times, their appetite for lending reduces, and the Bank of England is predicting a deep and long recession towards the end of 2022.
In the coming months, I expect some motor finance companies will also begin to tighten their lending criteria to minimise their own exposure as financial difficulties in the economy start to bite.
Many motor finance companies temporarily withdrew from the market altogether because of Covid-19’s lockdowns, and those who remained chose to only service high-credit-rating customers to reduce their non-prime lending exposure.
First Response Finance didn’t stop lending during the national lockdowns.
We also kept our phonelines open, ensuring that even in times of uncertainty, our customers knew they could contact us to discuss their concerns and that we would be there to support them.
As a result of this, more than 90 per cent of our customers continued to pay us!
In addition, we decided not to furlough our employees.
Instead, we gave them the tools to improve our business processes that they felt needed improving and the changes that were implemented have contributed to record growth as a result.
The team at First Response Finance have also begun collaborating with third parties to support our future growth, as well as ensure that even more motor dealers and customers can benefit from our award-winning services.
At First Response Finance, we truly put our customers and dealer partners at the heart of what we do.
The most important aspect of our business is that you can count on us and rely on us when it comes to your non-prime customers and we’ll be there when you need us most.
If you’d like to discuss how we can assist you and your non-prime customers, please give us a call on 0115 946 6365 or email us on [email protected].
This column appears in the current edition of Car Dealer – issue 174 – along with news, views, reviews, features and much more. To read and download it for free, click here.