Investec Bank subsidiary Investec Asset
Finance is set to enter the prestige car market, offering finance
to individuals and businesses in exclusive partnership with broker
London Asset Finance.
Investec believes the new venture, which
follows the likes of ING Lease and Lombard into the high-end
vehicle segment, has significant growth potential in a sector that
has seen a general contraction in participating lenders. The
company will take on business through London Asset Finance’s dealer
contacts, although it is not yet known how many other brokers will
be invited to pass on deals to the lender.
Investec will offer hire purchase finance on
sports and luxury cars, with or without balloon payments, from one
to five years’ length with a 15% deposit.
The loan size bracket within which Investec
proposes to write business – from £25,000 to £200,000 – allows for
the offering of variable rate business but a spokesperson for
Investec said there are no current plans to offer such rates at
Mike Francis, managing director of Investec
Asset Finance, said: “Following a dramatic contraction of the
number of lenders and available funds in the high value vehicles
market we see a real opportunity to fill a gap that has developed
over the last two to three years.
“We are continually looking at ways to expand
our financial product range into new asset classes to grow the
strength of the asset finance business and provide further
diversification to our portfolio.”
The news gained a tentative reaction from
brokers in the sector. Tim Marlow, owner of
independent supercar and luxury vehicle finance broker
Bridford, welcomed the news but was sceptical of Investec’s
“It is potentially good news for car dealers
as it is another funding line available,” said Marlow. “However, by
the very nature of finance underwritten by investment banks, a
strong return will be demanded which will presumably mean higher
rates for the clients.
“We do not see Investec Asset Finance
competing directly with the main UK lenders such as ING Lease,
Lombard or even the manufacturers’ own finance divisions, a good
example being Ferrari Financial Services, which is doing a great
job looking after the prestige marque.
“Flexibility is crucial in our market and as
an example, lower deposits than the 15% Investec quotes are often
required, plus there is no upper cap on the finance limit; both of
which are crucial in today’s prestige car finance arena.
“It will be interesting to see the product
range, underwriting requirements and service levels behind the
Investec offering which from our own experience are all key factors
of building long-term relationships with the dealers.”
A spokesperson for Investec responded by
saying, whilst the company set a minimum deposit of 15%, the
decision on the actual level of deposit will be made on a
case-by-case basis taking into account the circumstance of each
“The level of deposit will be only one part of
a decision process with its level being assessed on a case by case
basis (taking into account the vehicle being financed and the
credit quality of the borrower) but 15% is indicative of the
minimum deposit we would expect,” the spokesperson added.