The report focuses on the UK market for secured consumer finance for used / second-hand cars.
- It also includes agreements for used motorcycles, vans and leisure vehicles (e.g. campervans) however cars represent over 95% of the relevant consumer market.
- Secured loans are defined as those where the ownership of the vehicle rests with the lender during the life of the agreement.
- The report excludes unsecured personal loans that some consumers may use when buying a car, which we believe is now a relatively minor form of car finance.
- It includes agreements for vehicles that might be used for business purposes by individuals but are purchased by consumers rather than the businesses they run.
Key Report Features:
- Describes the overall used vehicle market size and historical growth rates.
- Profiles 25 largest used vehicle loan providers.
- Describes the role of brokers, including firms working with vehicle dealers and those dealing direct with consumers.
- Reviews drivers of used vehicle loan growth, setting out historical trends and available forecasts.
- Provides our forecast for the market to 2021, supported by evidence from market drivers and industry interviews.
Table of Contents
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About this report
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Summary
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The used car finance market
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Market size and growth
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Outlook
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Commercial / operational due diligence
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Custom market analysis
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Primary research
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Growth strategy
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Used car finance market
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Definition of the market
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Types of finance offered to purchase cars
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Hire Purchase
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Personal Contract Plan (PCP)
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Lease
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Alternative products
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Non-POS car loan
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Personal loan
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Mortgage further advance
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Credit Card
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Types of customers
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Market size and growth
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UK car market
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Dealer sales
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Franchised dealers
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Independent dealers
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Other vehicle distributors
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Motor finance penetration
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Motor finance volumes
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Non-prime lending
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Market Drivers
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Regulatory landscape
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FCA authorisation
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Regulatory requirements
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Recent regulatory developments
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UK Economic performance
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Consumer borrowing
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Ability to service borrowing
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Wages
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Source: Bank of England Financial Stability Report November 2017
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Other market drivers
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Competitive landscape
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Overview
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Success factors in dealer POS finance
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Market size and share
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Sub-Prime sector
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Split by channel
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Major lenders
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Barclays Partner Finance
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Description
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Activities
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Black Horse (Lloyds Banking Group)
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Description
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Activities
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Close Brothers Motor Finance
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Description
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Activities
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Recent developments
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Hitachi Capital
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Description
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Activities
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Recent developments
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MotoNovo
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Description
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Activities
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Recent developments
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Santander UK plc
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Description
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Activities
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Recent developments
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Other lenders
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1st Stop Car Finance
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Description
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Activities
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Recent developments
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Advantage Finance
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Description
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Activities
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Recent developments
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Alphera
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Description
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Activities
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Billing Finance
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Description
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Activities
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Recent developments
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Blue Motor
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Description
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Activities
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Recent developments
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First Response
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Description
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Activities
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Recent developments
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JBR Capital
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Description
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Activities
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Recent developments
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Mallard Vehicle Finance
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Description
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Activities
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Marsh
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Description
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Activities
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Recent developments
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Moneybarn
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Description
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Activities
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Recent developments
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Moneyway
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Description
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Activities
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Recent developments
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NIIB Group
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Description
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Activities
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Recent developments
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Oodle Financial Services
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Description
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Activities
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Recent developments
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Paragon
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Description
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Activities
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Recent developments
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Private & Commercial
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Description
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Activities
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Recent developments
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Raphaels Bank
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Description
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Activities
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Recent developments
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Startline
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Description
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Activities
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Recent developments
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The Car Finance Company
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Description
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Activities
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Recent developments
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Other funders
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Admiral Loans
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Car Finance Limited
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Ratesetter
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Car dealer finance brokers
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Auto Union Finance
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Creditas
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DSG Financial Services
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Eurodrive
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Evolution Funding
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Jigsaw Finance
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Mann Island Finance
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Motion Finance
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Whichdeal Limited
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Forecasts
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Approach
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Key driver forecasts
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Economic growth
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Interest rates
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Amount of consumer debt
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Unemployment and underemployment
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Household disposable income and wages
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Used car sales volume forecasts
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New car sales volume
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Used car sales volume
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Forecast scenario for used car sales volumes
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Motor finance penetration
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Regulatory impacts
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Other drivers of finance penetration
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Forecast scenario for used car finance penetration levels
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Forecast used car finance values
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Appendix: abbreviations
List of Exhibits
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Market participants
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Used vehicle new secured finance agreement volumes (Thousands): Actual and forecasts
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Car parc (millions)
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Car sales - volume (millions)
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Average period between car sales / years
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Dealer car sales - volume (millions)
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Consumer vehicle finance penetration level - transactions financed as % of total
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Total advances - volume / ‘000
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Total new consumer POS advances - value / £bn
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Key FCA regulatory requirements for car dealers
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UK real GDP / % annual changes
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UK outstanding unsecured consumer credit / £bn
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Historical number of unemployed and underemployed / m
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UK median earnings (current prices) and real household disposable income annual growth rates / % annual change
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UK household debt to income ratio
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Market participants
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Breakdown of annual new lending
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Volume and value of used cars finance in 2017 (millions and £ billions)
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Clydesdale Financial Services Ltd. used vehicle secured finance net investment - £m
- Lloyds Banking Group UK used vehicle secured finance net investment - £m
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Close Brothers used vehicle finance net investment - £m
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Hitachi Capital used vehicle net investment £m
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MotoNovo UK used vehicle net investment £m
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Santander Consumer Finance UK used vehicle net investment £m
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1st Stop Car Finance Limited Financials
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Advantage Finance Limited Summary Financials
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Billing Finance Limited Financials
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Blue Auto Holdings Limited Financials
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First Response Finance Limited Summary Financials
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JBR Capital Limited Financial Summary
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Mallard Leasing Ltd. Summary financials
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Marsh Finance Ltd. Summary Financials
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Moneybarn No. 1 Ltd. Summary Financials
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Moneyway (Secure Trust Bank) Summary Financials
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Oodle Financial Services Limited Summary Financials
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Paragon Banking Group PLC Summary financials
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PCF Bank Ltd. consumer finance division summary Financials
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Startline Auto Receivables Ltd. and Startline Motor Finance Summary Financials
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The Car Finance Company (2007) Limited Summary Financials
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UK real GDP / annual changes
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UK historical & forecast unsecured household debt / £bn
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Unemployment and underemployment / m
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Number of people in employment / m
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UK median earnings (current prices) and real household disposable income annual growth rates / % annual change
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Historical and forecast car sales - volume / £m
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Historical and forecast used vehicle finance - volume ‘000
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Historical and forecast used vehicle finance - £ billion
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
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Barclays Partner Finance
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Black Horse (Lloyds Banking Group)
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Close Brothers Motor Finance
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Hitachi Capital
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MotoNovo
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Santander UK
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1st Stop Car Finance
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Advantage Finance
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Alphera
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Billing Finance
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Blue Motor
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First Response
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JBR Capital
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Mallard Vehicle Finance
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Marsh
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Moneybarn
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Moneyway
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NIIB Group
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Oodle Financial Services
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Paragon
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Private & Commercial
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Raphaels Bank
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Startline
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The Car Finance Company
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Admiral Loans
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Car Finance Limited
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Auto Union Finance
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Creditas
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DSG Financial Services
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Eurodrive
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Evolution Funding
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Jigsaw Finance
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Mann Island Finance
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Motion Finance
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Whichdeal Limited
