Welcome to the September issue of Motor Finance. The turmoil in
the wider financial markets has certainly had its impact on the
world of consumer auto finance, and corporate fleet leasing. The
dramatic news that Lloyds is to take over HBOS would have been
unthinkable even a year ago; how the motor finance and fleet arms
of both banks will be affected remains to be seen. See HBOS and
Lloyds: The motor finance fallout for more.
The credit crunch has had an impact on many areas of running a
fleet: month-by-month extensions of fleet contracts are now
becoming more common, along with longer fleet contracts from the
outset. But while cars become ever-more reliable and long-lived,
there is a limit to how long corporate fleet clients are prepared
to keep hold of vehicles, even in today’s cost-conscious
environment – see Fleet contract terms: To four years – and
beyond? for further details.
The big news in motor retail is the fines handed down by the FSA
to dealer groups which it judged to have mis-sold PPI to consumers
at the point of sale (First fines levied for PPI mis-selling in
motor retail sector); Andrew Honey of the FSA offers advice
for motor financiers and their retail partners in Treat your
customers fairly when selling PPI . Meanwhile, Lombard’s
defeat at the Scottish Court of Session over VAT treatment of HP
overheads is bad news for other HP providers – more in Appeal
ruling goes against Lombard.
It is received industry wisdom that when cash is short, spending
is cut on ‘optional extras’ that are seen as nice to have, but not
a necessity – training, advertising, software etc. Technology firms
argue that, to the contrary, during a downturn it is more important
than ever to invest in systems. Leaving to one side the element of
self-interest in this approach, do they have a point? Brian
Rogerson examines how technology can help dealers beat the crunch
in a special report The economic downturn: Technology to the
With best wishes for the month ahead.