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Loans -
Those with poor credit rating badly affected by car loan shakeup - 21/04/2008
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Welcome Car Finance has withdrawn from working with a large number of independent dealerships to focus more on its own financing ventures. The move will affect many lower income buyers looking for cheap loans on second hand cars.
The company specialises in finance for those with poor credit history, usually when buying a second hand car. It is the biggest company in the UK to focus on car credit for those with poor credit ratings.
The move comes hot on the heels of well documented trouble at Scottish London, Welcome Car Finance’s closest competitor in lending to people who have struggled to be approved for credit. The timing has led to speculation that Welcome Car Finance, part of the Cattles company, is planning a take over of Scottish London.
Welcome Car Finance denies these rumours, saying that the move simply reflects a possibility to be more profitable by lending directly to customers rather than through third party dealerships. They have noticed an increase in the number of customers to its twelve national dealerships, prompting the exploration of the possibility of lending independently.
A spokesperson for Welcome Car Finance gave this insight as to the companies motivation “Why would we help other dealers make money from selling cars and loans when we can make more doing it ourselves?”
David Gregory, founder of the Car Credit Complaints website highlighted the impact that the move will have on the car credit market, saying: “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 chose between the dozen Welcome dealerships.”
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Only Loans Ltd is authorised and regulated by the Financial Services Authority, FSA registration number: 439110. Our registered offices are 1 Kings Avenue, Winchmore Hill, London N21 3NA, company number: 05222154. Telephone 0207 377 1805.
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