Car finance specialist applies the brakes
Car finance specialist S&U has increased its rejection rates to 75% in a “prudent focus on quality”.
The Solihull-based lender collected nearly £12m a month in the first half of this year, which is 20% higher than in 2017. But it admitted impairment “continues to run at higher levels than last year”.
It has sought to quietly apply the brakes in what it described as a “slowing economy”.
S&U has made changes to its approvals process – which has reduced acceptances from 31% to 25% in its motor finance subsidiary, Advantage Finance – and it has “early indications of an improvement in both new customer quality and early repayment performance”.
Despite its concerns, Advantage Finance “continues to trade well with profits again at record levels”, it said.
The used car finance market has been growing by 12% year on year and Advantage Finance is typically receiving more than 80,000 monthly finance applications.
S&U chairman Anthony Coombs said: “Advantage Finance maintains its remarkably reliable record of continued profitable growth over the past nineteen years in a variety of macro-economic conditions. Improvement in product, customer service and in underwriting strengthens their ability to build on this in years to come.”
The group also includes property bridging business Aspen Finance. S&U has said its loan book has grown from £11m to £16m since the year end and its debt quality is “good”.
