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Car Finance Industry Research Report in UK - April 2014: Market Research Report

MarketResearchReports.Biz announces addition of new report “Car Finance - UK - April 2014” to its database

 
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Albany, NY -- (SBWIRE) -- 04/25/2014 -- MarketResearchReports.Biz presents this most up-to-date research on "Research Report On Car Finance Market In UK" - April 2014

The key to sustaining an impressive level of growth in the car finance market in the years to come will be offering extras to overcome consumer reactions to interest rate rises, and finding a way to get a real foothold in the used car market.

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Table of Content

Introduction

Report scope
Hire purchase
Personal contract purchase
Lease purchase
Abbreviations

Executive Summary

The market
Massive growth in value of car finance advances in the past two years
Figure 1: Forecast of the value of point-of-sale car finance, by gross advances, fan chart, 2008-18
Market factors
Consumer confidence reaches a five-year high
Figure 2: Consumer confidence barometer – UK, January 2009-February 2014
Strong new car sales give car finance providers a large target market
Figure 3: UK new car registrations 2009-13
PPI compensation used to fund car purchases
Providers prepare for FCA regulation
Companies, products and innovations
Ford credit, VFWS and GMAC are the car finance market leaders
Little innovation, but a couple of new products
The consumer
Car finance is the most commonly used form of credit for car purchases
Figure 4: Method of purchasing most recent car, February 2014
Half of all credit for car purchases is arranged at dealerships
Figure 5: Types of company used to arrange credit for most recent car purchase/lease, February 2014
Less than half of credit-funded car buyers actively researched their finance options
Figure 6: Car finance product research prior to purchase, February 2014
Nearly a third of consumers would not consider car finance, while a quarter are concerned about balloon payments
Figure 7: Attitudes towards car finance, February 2014
Freebies could persuade nearly a quarter to use car finance
Figure 8: Attitudes towards car finance providers, February 2014
What we think

Issues and Insights

Impressing and keeping new users is key to supporting recent growth
The facts
The implications
Despite its dominance, point-of-sale finance providers need to work to stay ahead
The facts
The implications
How to improve presence in the used car market?
The facts
The implications

Trend Application

Borrow a lifestyle instead of buying a car?
Offer experts to achieve success
Older consumers have ignored car finance, but this can change

Market Drivers

Key points
Improved confidence signals consumers’ return to the automotive market
Figure 9: UK consumer confidence barometer, January 2009-January 2014
UK car population maintains steady rise…
Figure 10: Number of cars in use, 2008-12
but the age of cars on the road has increased
Figure 11: Comparison of age of cars on the road, by percentage of total, 2008 vs 2012
Impressive growth in new car sales over the last 18 months…
Figure 12: UK new car registrations, 2009-13
assisted by record-low interest rates for finance
Figure 13: Monthly percentage values of selected interest rates. January 2009 – January 2014
Compensation from mis-sold PPI has boosted car budgets
Figure 14: Monthly value of compensation paid to consumers for mis-sold PPI
Consumer credit comes under FCA regulation
Regulator has also raised concerns about GAP insurance

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Competitor Products

Key points
Car finance faces competition from many alternative funding methods
Figure 15: Method of purchasing most recent car, February 2014
Demand for consumer credit has increased…
Figure 16: Gross consumer credit lending, 2009-13
and unsecured loans are most commonly used for car purchases
Figure 17: Reasons for taking out most recent loan product, by period of time most recent loan held for, November 2013
Only a minority of consumers can rely on savings to cover a car purchase
Figure 18: Value of saving and investments, November 2013

Market SWOT Analysis

Figure 19: Car finance market – SWOT analysis, 2014

Who’s Innovating?

Key points
Innovation in short supply
Peugeot’s Just Add Fuel lets drivers pay all car costs in one bill
New products have been heavily advertised
FLA helps to make car finance clearer

Market Size and Forecast

Key points
Car finance has experienced major growth in volume and value
Figure 20: Volume and value of point-of-sale car finance plans sold (private sector only) 2009-13
Use of car finance for new car purchases has risen by more than a fifth in two years…
Figure 21: Proportion of new private car sales bought with a car finance agreement, 2009-13
but there is still low penetration amongst used car sales
Figure 22: Proportion of used car sales bought with a car finance agreement, 2009-13
Car finance plans for new vehicles are driving the market
Figure 23: Volume and value of private car finance plans sold, segmented by new and used cars, 2009-13
Market forecast
Volume of car finance sales expected to grow by a third in five years
Figure 24: Forecast of volume of point-of-sale car finance plans, fan chart 2008-18
Figure 25: Forecast of volume of point-of-sale car finance plans, 2008-18
Car finance value expected to top £29bn in 2018
Figure 26: Forecast of the value of point-of-sale car finance, by gross advances, fan chart, 2008-18
Figure 27: Forecast of the value of point-of-sale car finance, by gross advances, at current and constant prices, 2008-18
Forecast methodology
Fan chart explanation

Market Share

Key points
Most car finance is arranged at a dealership
Figure 28: Types of company used to arrange credit for most recent car purchase/lease, February 2014
Ford is the top-selling car manufacturer in the UK…
Figure 29: Share of UK new car registrations, 2012-13
but VWFS have the most wide-reaching partnerships
GMAC leads the specialist finance market

Companies and Products

Ford Credit
GMAC Financial Services
Volkswagen Financial Services
Black Horse Motor Finance
Santander Consumer Finance
Personal loan providers

Methods of Funding Car Purchase

Key points
Car finance funds a fifth of car purchases…
Figure 30: Method of purchasing most recent car, February 2014
but savings are the most common form of car funding
25-34-year-olds are most likely to use car finance
Figure 31: Ownership of car finance product by age group, February 2014
New cars are three times more likely to be bought on car finance than used cars
Figure 32: Age of purchased car by method of purchasing most recent car, February 2014

Types of Finance Provider Used

Key points
Car dealerships arrange more than half of all credit plans
Figure 33: Types of company used to arrange credit for most recent car purchase/lease, February 2014
HP plans are the most common dealership-based products; personal loans dominate at banks
Figure 34: Type of company used to arrange credit for most recent car purchase/lease by product ownership, February 2014
Banks lead dealers in financing used cars
Figure 35: Type of company used to arrange credit for most recent car purchase/lease by age of car bought, February 2014

Car Finance Product Tenure

Key points
Almost 60% of car buyers using credit, did so in the last two years
Figure 36: Time since most recent car was purchased/leased where a credit product was used, February 2014
Young people were most likely to use car finance last year
Figure 37: Percentage of car finance plans arranged in the last 12 months by age group, February 2013

Car Finance Product Research

Key points
Less than half of car buyers researched credit options prior to purchase
Figure 38: Car finance product research prior to purchase, February 2014
Men are more likely to have researched credit options
Figure 39: Percentage of consumers who researched credit options prior to car purchase/lease by gender, February 2014
Car finance owners more likely than others to choose their car first…
Figure 40: Car finance product research, by type of product used
while other credit holders are more likely to choose funding first

General Attitudes Towards Car Finance

Key points
Consumers remain wary of credit
Figure 41: Attitudes towards car finance, February 2014
Low deposits and fixed payments are important for car finance users
Figure 42: Attitudes towards car finance by certain methods of purchasing most recent car, February 2014
More recent buyers are less concerned about balloon payments…
Figure 43: Attitudes towards car finance by age of most recent finance product, February 2014
and are open to leasing, as long as they have control over how they use the car

Attitudes Towards Car Finance Providers

Key points
Freebies make people more likely to take out car finance
Figure 44: Attitudes towards car finance providers, February 2014
High-income households are more interested in the product than the provider
Figure 45: Percentage of consumers who said the terms of the product were more important than the type of provider, by annual household income, February 2014
Younger car buyers are more likely to value car-buying advice
Figure 46: Percentage of car owners/those who intend to buy a car who would be more likely to borrow from a bank if they could get car advice, by age group February 2014
Car finance holders favour dealerships
Figure 47: Attitudes towards car finance providers by certain product ownership, February 2014

Appendix – Market Size and Forecast

Volume
Figure 48: Best- and worst-case forecast of the volume of car finance plans sold, 2013-18
Value
Figure 49: Best- and worst-case forecast of the value of car finance, by gross advances, 2013-18

Appendix – Product Ownership

Figure 50: Ownership of products used to fund the purchase of a car by demographics, February 2014
Figure 51: Ownership of products used to fund the purchase of a car (continued) by demographics, February 2014
Figure 52: Ownership of products used to fund the purchase of a car, (continued) by demographics, February 2014

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Appendix – Types of Finance Provider

Figure 53: Types of finance provider by demographics, February 2014

Appendix – Car Finance Product Tenure

Figure 54: Age of most recent finance product by demographics, February 2014

Appendix – Car Finance Product Research

Figure 55: Car finance product research prior to purchase, by demographics, February 2014
Figure 56: Car finance product research prior to purchase (continued), by demographics, February 2014

Appendix – Attitudes Towards Car Finance

Figure 57: Most popular attitudes towards car finance by demographics, February 2014
Figure 58: Next most popular attitudes towards car finance by demographics, February 2014

Appendix – Attitudes Towards Car Finance Providers

Figure 59: Most popular attitudes towards car finance providers by demographics, February 2014
Figure 60: Next most popular attitudes towards car finance providers by demographics, February 2014

Appendix – Additional Research on PPI Compensation

Figure 61: Total amount of compensation received by successful PPI mis-selling claimants, April 2014
Figure 62: Most popular uses of PPI compensation, April2014

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