Industry News
Weak consumer credit demand likely to affect automotive lenders
19th October 2006
Findings of the 19th, autumn quarterly UK Financial Activity Bulletin from John Gilbert Financial Research suggest car finance suppliers will find weak demand for the next six months. Consumers show little appetite for borrowing in the coming months, though their caution is set against a backdrop of steadily improving personal finances with the proportion of households running into debt (3%) falling to its lowest since July 2002. With a further interest rise likely in November there is little demand for new debt or additional outgoings.
With weaker intentions across most savings, investment, borrowing and debt repayment activities, the proportion of people expecting to be financially active this quarter is the lowest (76%) in the five years of the survey commissioned by JGFR from GfK NOP. This compares to 81% in June and 84% in September 2005. Borrowing and debt repayment intentions fell to record lows while savings/investment expected activity is at its lowest since December 2004.
Only 16% of the adult population intend to borrow in the next 6 months, compared to 17% in June and 20% in September 2005.
John Gilbert says lenders will have to compete very strongly to attract cautious consumers, and suggests there will be weak demand forecast for car financing plans in the next six months.
(www.jgfr.co.uk)
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