The cost-of-living crisis means more and more people are being declined for motor finance.
The reasons for this are obvious and understandable – front-line lenders especially have become more cautious about to whom and how much they lend at a time when personal finances are under a considerable amount of pressure.
So where do you turn to when your prime lender says no?
Traditionally – and in still too many dealers even today – there is a vertiginous drop to a sub-prime lender offering punishing interest rates and terms, but thankfully, more sophisticated options are now available.
Increasing numbers of motor retailers are constructing lending panels that offer a range of finance providers, products and credit appetites to suit the profiles of different car buyers.
Each of these lenders will tend to be experts in credit-scoring their particular target customer base, offering the best possible solution for each. It’s a way of meeting a wide range of needs as exactly as possible.
Startline’s position within these panels is as something we call a flexible lender – a position we hold for more than half of both the UK’s top 50 franchise and independent dealers.
Typically, we offer motor finance to around one in three people who have been turned down by prime lenders.
Our flexible approach to finance uses a market-leading scorecard, sophisticated technology and human insight to offer thoughtfully constructed products, highly competitive rates and terms, and customer service standards comparable with the very best that our sector has to offer.
Essentially, we work to look at the applicant as an individual.
Of course, we have some hard lending rules, but in areas where others take a black-and-white approach, we examine the applicant in more detail.
This isn’t just important because of the conditions created by worsening personal finances, but also thanks to longer-term factors such as falling home ownership rates and ongoing growth in contract and temporary working.
Obviously, these issues have recently become more acute, and many dealers are asking whether the products and credit appetites that have worked for their customers in the past remain relevant through the remainder of this year and beyond.
Certainly, we are seeing a considerable number rethink the structure of their motor finance options in light of recent experiences, and have helped them to create something that better answers their needs in 2023.
We know from years of experience that a successful graded lending panel of the kind in which we play a key role for many motor retailers is highly effective when it comes to maximising outcomes for dealers and car buyers.
More recently, it is proving to be the best approach for the cost-of-living crisis.
About Startline Motor Finance
Founded in 2013, Startline is one of the UK’s leading motor finance companies.
It provides flexible solutions to around half of the top 50 franchise dealers and 70 per cent of the top 50 independent car retailers measured by turnover, as well as accounting for more than two per cent of the motor finance market by volume.
We aim to deliver market-defining levels of customer service, compliance, innovation and insight.
The company is headquartered in Glasgow, where it employs more than 170 people, and has a comprehensive sales presence throughout the whole of the UK.