Leasing Set To Become Tougher With Lack Of Money To Lend

Wednesday, 20. January 2010

As we know credit has been harder to arrange of late with some vehicle finance funders down to around a 20% acceptance rate. But if you foolishly believed that the situation would ease this year, considering the fact that bankers are again paying themselves some massive bonuses, you would be wrong! You see years ago credit card companies were credit card companies and leasing companies were either part of a transport or manufacturing company or part of a dealership group, all of which funded their own operations. However, these days, leasing companies are affected by toxic debts accumulated by mortgage companies or credit card companies, most of which are interwoven within the banking system. In the third quarter of 2009 the credit card companies wrote off £1.6 billions in bad credit card debt which has had a knock on affect on the amount of money available to lend via the car leasing activities of the banks having to carry this loss. The figure of £1.6 billions was double the amount written off the previous quarter and half the total amount written off in 2008. Whilst this action has been necessary to paint an accurate picture of bank receivables it doesn’t help the leasing division when they ask for more money to lend in order to meet demand. I can’t see this situation improving so it makes it even more important to make sure that you pay attention to your credit file and try to keep it as clean as possible and to resolve any disputes or incorrect entries. By Graham Hill