Table of Contents
Introduction and Abbreviations
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- Scope of the report
- History
- Context
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- Figure 1: Car finance in the context of lending overall, by value and purpose, logarithmic scale, 2005
- Concepts
- The roles of legal interest and security
- Global information and research
- Definitions
- Consumer research
- ACORN
- Abbreviations
Premier Insight
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- Youngsters want to get moving
- On the road to independence
- Would you buy a used car from this lender?
- ‘When the ducks quack, feed them’
- Work smarter not harder on the better-off
Executive Summary
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- Background considerations
- Industry issues
- Market size
- The consumer
- The future
Market Drivers
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- The underlying asset
- Varoom
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- Figure 2: Private and light goods vehicles currently licensed, 1997-2004
- Trading down?
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- Figure 3: Comparison of used and new vehicle registrations, 1997-2004
- Consumers putting the brakes on?
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- Figure 4: Comparison of fleet, business and private new car registrations, 1997-2004
- Consumer spending and confidence
- Less boom, less varoom
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- Figure 5: Forecast economic indicators, 2005-10
- Figure 6: Comparison of trends in savings ratio and new car registrations, 2005-10
- Confidence is key
- Impact of debt
- Competitive environment
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- Figure 7: Competitive model for industry, 2005
- Demographic factors
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- Figure 8: Population profile, by selected age groups and years, 2003-18
- Youngsters not making the grade
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- Figure 9: Trends in holding a driving licence, by age group, 1976-2002
- His ‘n’ Hers on the up
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- Figure 10: Household ownership of cars, by penetration of multiple ownership, 1996-2004
- His Not Hers also on the up
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- Figure 11: Proportion of persons living alone, 25-44 age group (%), 1973-2002
- Regulation
- Removing the blockage
- Consumers behaving badly
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- Figure 12: Individual and company bankruptcies in England and Wales (not seasonally adjusted), 1995-2004
- Lenders under pressure
- The Information Commissioner puts his oar in
- Consumer protection really motoring
- Europe in doubt?
Market Size
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- Car finance in context
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- Figure 13: Car POS finance relative to other consumer credit, 2004
- Aggregate car finance
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- Figure 14: Aggregate lending for car purchase, by gross advances, 2000-04
- Foot off the accelerator…
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- Figure 15: Summary data for volume of cars purchased using car finance, 1997-2004
- …but hand in the pocket
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- Figure 16: Summary data for value of point-of-sale car finance, 1997-2004
- Average loan values converging slightly
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- Figure 17: Mean loan values for car finance, by vehicle type, 1997-2004
- Used car finance holds up
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- Figure 18: Value of consumer car finance – new and used cars, by type of product, by gross advances, 1997-2004
- Two different markets
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- Figure 19: Distribution of new car finance, by type of product, by gross advances, 2000-04
- Figure 20: Distribution of used car finance, by type of product*, by gross advances, 2000-04
- Strategic questions
Products
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- Types of product
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- Figure 21: Types of car finance, 2005
- Asset-based finance
- Hire-purchase
- Conditional sale
- Lease
- Personal Contract Purchase
- Personal Contract Hire
- Other forms of asset-based finance
- Non-asset-based finance
- Car loans
- Unsecured loans
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- Figure 22: Variation in unsecured lending availability, November 2004
- Secured loans
- Structuring of products
- Additional product features
Key Players
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- Figure 23: Main types of car finance provider, June 2005
- Manufacturers
- Finance houses
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- Figure 24: Relationships between finance houses and vehicle brands, December 2004
- Specialist lenders
- Banks
- Market share
- Personal loans
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- Figure 25: Market share in personal loans, September 2004
- Point-of-sale finance
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- Figure 26: Earlier estimate of market shares in point-of-sale finance, December 2002
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- Figure 27: Current estimate of market shares in point-of-sale finance, August 2005
- How accurate is this model?
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Distribution
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- Point of sale
- New cars
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- Figure 28: Number of franchised motor dealership outlets, 1997-2004
- Used cars
- Banks
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- Figure 29: Retail banking branch distribution capacity, mid-2005
- Summary of physical distribution
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- Figure 30: Total physical distribution capacity for car finance, mid-2005
- The Internet
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- Figure 31: Extract from Mintel's Internet Quarterly, by category relevant to car finance, April 2005
Advertising and Promotion
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- The quantitative picture
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- Figure 32: Top ten car manufacturer finance advertisers, selected 12-month periods October 2001-April 2005
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- Figure 33: Top ten Personal Contract Plan advertisers, selected 12-month periods October 2001-April 2005
- The qualitative view
- Psychological influences
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- Figure 34: Hierarchy of human needs
- Cars and sex
- Car finance and…?
International Context
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- Common global finance
- North America
- Continental Europe
Consumer Financial Activity
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- Consumer confidence remains weak but prospects look more promising
- Relationship with the main financial services providers
- High levels of activity from June 2005 onwards
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- Figure 35: Savings, investment, borrowing and debt repayment – consumers’ expected activity, March 2004-June 2005
- Younger respondents looking to refresh their financial affairs
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- Figure 36: Expected financial activity by socio-demographic and income groups, June 2005 and average for the last 14 quarters
- More activity than a year ago
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- Figure 37: Leading financial activities planned in the next six months, June 2004-June 2005
- Housing indicators pick up sharply
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- Figure 38: Intended mortgage and property purchase activity, June 2003-June 2005
- HSBC gains ground in terms of MFSPs
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- Figure 39: Leading main financial services providers: market shares, June 2004-June 2005
- Bank of Scotland will gain life and pensions business, Nationwide BS should be strong in savings
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- Figure 40: Saving, investment and lending market sizes, by expected customer demand and brand leaders (overall % intending to undertake activity in brackets), June 2005
- The Scottish banks will have the most active customer bases
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- Figure 41: Activity levels of main financial providers’ customer bases, June 2005
The Consumer
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- Figure 42: Overall product penetration, July 2005
- Money is the key
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- Figure 43: Car ownership overall, July 2005
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- Figure 44: Car ownershp and purchase intentions, overall and by gender, July 2005
- No surprise, then
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- Figure 45: Car finance, car ownershp and purchase intentions, overall and by gender and socio-economic group, July 2005
- Implications
- Family drives the need
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- Figure 46: Car finance, car ownershp and purchase intentions, overall and by lifestage, July 2005
- Implications
- Other analyses
- Ticking over steadily
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- Figure 47: Sources of funds, overall, July 2005
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- Figure 48: Sources of funds, overall and by gender, July 2005
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- Figure 49: Sources of funds, overall and by age and socio-economic group, first six responses, July 2005
- Implications
- Scots tak’ the high road
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- Figure 50: Sources of funds, overall and by TV region, July 2005
- Implications
- People carriers
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- Figure 51: Sources of funds, overall and by own children in household, July 2005
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- Figure 52: Graphic representation of the pattern of car finance among family groups by own children in household, July 2005
- Implications
- Keeping them off the streets
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- Figure 53: Sources of funds, overall and by ACORN group, July 2005
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- Figure 54: Age profiles of ACORN groups, July 2005
- Implications
- Other analyses
- Relationship to vehicle owned
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- Figure 55: Analysis of type of finance used, by type of vehicle purchased, July 2005
- Implications
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Consumer Attitudes and Targeting Opportunities
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- Figure 56: Features important in financing, overall, July 2005
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- Figure 57: Car finance, features important in financing, overall and by gender, first six responses, July 2005
- Implications
- Focus on value
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- Figure 58: Features important in financing, overall and by age and socio-economic group, first six responses, July 2005
- Implications
- Scots away
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- Figure 59: Features important in financing, overall and by TV region, first six responses, July 2005
- Implications
- Family pressure is the key
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- Figure 60: Features important in financing, overall and by lifestage, first six responses, July 2005
- Implications
- Other analyses
- Features favoured in products
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- Figure 61: Feature preferences, by financing method, July 2005
- Implications
- Shades of Arfur Daley
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- Figure 62: Attitudes towards borrowing, overall, July 2005
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- Figure 63: Attitudes towards borrowing, overall and by gender, first six responses, July 2005
- Implications
- Aspiring to the lifestyle
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- Figure 64: Attitudes towards borrowing, overall and by age and socio-economic group, first six responses, July 2005
- Implications
- Scots motoring again
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- Figure 65: Attitudes towards borrowing, overall and by TV region, first six responses, July 2005
- Implications
- The Italian Job
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- Figure 66: Attitudes towards borrowing, overall and by own children in household, lifestage and Mintel’s Special Groups, first six responses, July 2005
- Implications
- Better clutch control in digital marketing
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- Figure 67: Attitudes towards borrowing, overall and by newspaper readership and technology usage, first six responses, July 2005
- Implications
- Further analysis
- Dealers
- Bank reliant
- Bargain hunters
- The wary
- The unaware
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- Figure 68: Quantitative consumer typology, overall and by gender, July 2005
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- Figure 69: Quantitative consumer typology, overall and by age and socio-economic group, July 2005
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- Figure 70: Car finance, consumer attitudes by consumer type, July 2005
- CHAID analysis
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- Figure 71: CHAID analysis of preferences by target group, July 2005
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Industry Views
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- Cars and sex
- The balance of power
The Future
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- Whither the car finance market?
- Change management
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- Figure 72: Strategic capability reference model for asset finance and generic lending industries, July 2005
Forecast
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- Figure 73: Forecast of aggregate lending for car purchase, by gross advances, 2004-10
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