12:00 pm, July 19, 2024
Haydock Vehicle Funding has pulled support for car dealers across the UK following an alleged multi-million-pound fraud.
Sources in the motor trade say a London-based car dealer has allegedly defrauded the finance company out of nearly £7m.
Doctored invoices are said to have been used to load cars on to a stocking facility the car dealer had with Haydock.
Haydock has told its current dealer partners that they now need to find other funding by the end of this month, leaving many scrabbling around to find alternative firms.
BCA is also said to have lost money in the scam with the same dealer. A spokesperson for the firm confirmed BCA stopped lending to the dealer in question more than a year ago.
A police investigation is said to be under way, but Car Dealer has not been able to verify this independently at this time.
Haydock would not comment directly on the alleged fraud.
However, a spokesperson for the lender said: ‘Following a review, we have taken the strategic decision to wind down our stocking facility to focus on other growth opportunities across the business.
‘During this wind-down, our team is working closely with our dealers to manage orderly exits and helping them to find alternatives. We obviously can’t comment on individual exposures.’
Haydock started lending to car dealers in 2020 and built up an extensive client base across the UK.
EV Experts, the specialist electric car dealer, said it was one of the dealers that had lost its funding from Haydock and was now struggling to find a replacement partner.
‘We switched to them as they were great to deal with,’ said EV Experts co-founder Martin Miller.
‘There are a lot of dealers who have been hit by this. Once your stock funding has gone it is very painful.
‘Everyone has got very twitchy as a result of this alleged fraud. It’s incredibly difficult to get funding now and a lot of them have lost the appetite for electric cars, especially considering the price drops that have happened.’
Co-founder Estelle Miller said this decision had come at an ‘incredibly difficult’ time for dealers.
She added: ‘For some dealers, Haydock’s withdrawal – and other stock funders becoming more cautious because of the alleged fraud – came at a really difficult time.
‘Autumn 2022, with the cost-of-living crisis/rising energy prices, to August 2023 was unprecedented and difficult trading conditions for some dealers.
‘For example, used electric cars on average fell by 48.5% and demand was also highly impacted by the government’s decision to push back the petrol/diesel ban to 2035.
‘This has left many dealerships with balance sheets that are negative, and whilst there is liquidity and increasing demand in the marketplace right now, traders have not had time to recover and improve their balance sheet positions.
‘The withdrawal of Haydock and the cautious approach being taken by stock funders generally is punishing those that have impeccable behaviour records, too.’
