According to a recent report some consumers may find it increasingly difficult to get finance for a vehicle, after a major vehicle financing company decided to withdraw credit from all dealerships other than its own. In the past Welcome finance provided vehicle financing to a number of independent dealerships, and this gave many consumers that could not access more affordable deals the chance to enjoy some choice when it came it getting a vehicle. Welcome car finance has been known for providing finance to those with damaged credit.
However, officials feel that consumers could really lose out since the company recently announced that it was withdrawing finance from all independent outlets, and focussing instead on its own outlets. Officials from the firm claim that the move to withdraw finance from other outlets is nothing to do with the global credit crunch, but is the result of the firm realising that they can make more money focussing on their own dealerships rather than on other dealerships.
One official stated: ‘Why would we help other dealers make money from selling cars and loans when we can make more doing it ourselves?’
However, many industry officials believe that this will come as a blow to many drivers in the UK who may now find it difficult to get finance on a cheap vehicle if they have bad credit. Drivers that have damaged credit may find that their options when it comes to car finance are very limited, particularly in the current financial climate, and therefore this decision from Welcome could really affect their ability to get a vehicle.
One industry official stated: ‘Most of the sub-prime car market relies on Welcome, so many dealers - perhaps 60-70% - will find this a devastating blow. Consumer choice will also suffer. Whereas those with a poor credit rating could previously turn to hundreds of dealers, they will now only be able to choose between the dozen Welcome dealerships.’
For those looking for car finance there are a number of options still available, and this includes dealership finance, PCP, hire purchase, or a standard bank loan. However, it is difficult for those with bad credit to gain access to some of these options, and this means that many people with bad credit may have to turn to specialist dealerships with less choice in order to get a more reliable vehicle.
Welcome has been providing car finance to those with bad credit for some time, but due to its decision to concentrate solely on its own dealerships for future finance many future purchasers are likely to be affected. Consumers that are looking to purchase a vehicle will find that in order to get finance from Welcome they will have to choose a vehicle from the firm’s own showrooms, and this could mean having to opt for a more expensive vehicle, eliminating any chances of getting a cheaper car with finance.
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