The Difficulties Of Underwriting

Thursday, 21. August 2008

As the credit crunch continues to have an effect more brokers are reporting difficulties with underwriting. As many of my readers know I have a column with Motor Finance – the journal of the motor finance industry and many brokers that contact me, as a result of my column, have reported that lease enquiries are still running high but finance declines are running higher than ever as funders become more selective as they prepare for the anticipated recession. This is when selecting the right broker is so important. We have access to a large number of funders, either directly or through our buying group, but some that advertise on the net or have only been trading for a short period are having difficulties with finance companies who are writing less business. Obviously if a leasing company provides very low rates they are looking for clients that can easily afford the monthly payments. However, when they decline you for finance for what appears to be no reason, how much help can these bucket shop brokers be? They are not professional in their approach, if they can be bothered to appeal the decision at all, added to which you now have additional searches on the credit files which can go against you. We still have a very high acceptance rate, even if it means that we have to occasionally go back to the client and ask for an increased initial rental. My advice at the moment is that if you can afford a higher initial rental, say 6 months in advance, offer it at the start as that may help your application if you have had a few late or missed payments and make sure you use a professional broker to help you through the process. By Graham Hill