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UK Car Loans 2004Product Type: Market Research ReportPublished by: Datamonitor Published: February 2004 Product Code: R313-6514 Description IntroductionThe range of credit options available to the private motorist has expanded considerably in recent years, and a number of direct lenders have been targeting this sector by offering specially packaged car loans. However, the number of providers operating in this sub-market remains small and their products have so far had only limited success. This brief examines the reasons behind this. Scope Provides a comprehensive assessment of recent growth in the unsecured car loans market and examines performance of market drivers Assesses different marketing techniques employed by unsecured car loan providers currently operating in the market Draws on the data from a number of secondary and primary sources, including industry interviews Provides two scenario-based forecasts for the future performance of the unsecured car loans market Report Highlights New car registrations and used car sales have been buoyant in recent years, but the market has also witnessed dramatic falls in prices of vehicles. As a result, despite the increasing number of cars being sold, the potential value of the total new and used car market has fallen since 1999 The UK motor finance market is very competitive. In addition to the traditional point of sale motor finance, an emerging competitive force in the form of secured lending has also been encroaching on unsecured car loan providers' customer base. As a result, gross advances in unsecured car loans have decreased since 1999 Currently, unsecured car loan providers employ two different marketing techniques in the promotion of their products. However, the extremely commodified nature of the unsecured personal loan marketplace has made differentiation on feature other than price problematic for lenders. Reasons to Purchase Comprehensive evaluation of the unsecured car loans market and its drivers enables you to assess the potential of this sector Analysis of competitors' marketing techniques provides you with tools to design your own strategy Datamonitor's five-year scenario-based forecasts give you an insight into the future of the unsecured car loans market Table of Contents TABLE OF CONTENTSABOUT DATAMONITOR 2 CHAPTER 1 INTRODUCTION 6 What is this brief about? 6 Who is the target reader? 7 How to use this brief 7 CHAPTER 2 MARKET CONTEXT 8 Introduction 8 Definition of unsecured car loans used in this chapter 8 Strong new and used car sales have driven the motor finance market in recent years 8 Despite record sales, the total value of new and used car markets has fallen since 2001 16 Gross advances in unsecured car loans have declined since 1999 18 Point of sale motor finance and secured lending competed with unsecured car loans for car buyers’ business in 2003 22 Point of sale motor finance poses a traditional competitive threat to unsecured car loans… 24 …but the growth of secured lending has made competition even tougher 26 Unsecured car loan providers are being squeezed on both fronts and face an uncertain future 27 CHAPTER 3 COMPETITIVE DYNAMICS 29 Introduction 29 Lenders offer two different car loan products to target car buyers 29 The unsecured car loans market is contested by only a handful of mainstream lenders 30 Unsecured car loan providers employ different promotional strategies 32 The majority of unsecured car loan providers are spending less on advertising their products 38 Unsecured car loan providers find it hard to differentiate their products purely on price 41 Datamonitor Retail Banking Team view 45 CHAPTER 4 THE FUTURE DECODED 46 Introduction 46 Scenario one: the unsecured car loans market will slow 47 Car sales will struggle to maintain their current record levels 48 Secured lending will continue to grow strongly, as point of sale motor finance makes steady gains 50 The unsecured car loans sub-market will continue to decline 51 Scenario two: worsening economic conditions will inadvertently benefit the unsecured car loans sub-market 52 Car sales take a knock as a result of a worsening economic environment 53 Forecasted growth of competing credit products will be disappointing 55 The unsecured car loans market will grow as a result of weaker competition 56 Datamonitor Retail Banking team view 58 CHAPTER 4 APPENDIX 59 Supplementary data 59 Tables not included in the main body of the brief 59 Definitions of motor finance options available at the point of sale 63 Research methodology 64 Datamonitor’s loans and credit forecasting methodology 64 Further information 64 Relevant links 64 Relevant reports 66 Datamonitor Financial Services Consulting 66 Datamonitor Retail Banking team 68 How to contact experts in your industry 69 |
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