U.K. Car Lenders Bullish on Growth

The Finance and Leasing Assn.’s quarterly finance confidence survey finds 83% of respondents expecting growth in the U.K.’s retail new-car financing market, with 35% anticipating gains of between 10% and 20%.

The association says the optimistic outlook reflects the strong performance reported by the motor-finance industry since the beginning of 2012.

The survey also shows 95% of respondents envision growth in the retail used-car finance market, with 21% expecting gains of between 10% and 20%.

Some 53% expect activity in the light-commercial-vehicle finance market to increase, with almost a quarter looking for growth to exceed 10%.

Respondents express concern over increasing uncertainty regarding the transfer of consumer-credit regulation to the new Financial Conduct Authority.

The association says it is working with the government and regulators to try to ensure the new rules are fair for both borrowers and lenders. It cites concerns about the timetable and transitional arrangements.

“The survey brings together the views of leading executives and it is quite clear that they want a new regulatory regime which does not harm competitiveness or the availability of credit for consumers,” association Head of Motor Finance Paul Harrison says in a statement.

The new regulatory regime takes effect April 1, 2014, but the association says the government’s current timetable will not see the final rules published until the preceding month.

“A sensible transition is needed to ensure the industry and the new regulator are ready for what will be the biggest upheaval in consumer credit regulation for a generation,” Harrison says.

Association members last year provided consumers with £16.7 billion ($25.8 billion) to help support the purchase of almost 1.5 million vehicles. In the twelve months ending in April, they financed 73.2% of private new-vehicle sales in the U.K.