First Auto Finance exudes confidence for 2017

First Auto Finance is now the largest independent motor finance company in Ireland

Established in 2011,First Auto Finance entered the finance market when car finance companies such as GE Money, PTSB Finance, Bank of Scotland and Lombard were scrambling to exit. The motor industry was on its knees and almost friendless when it came to finance providers.

“We commenced operating at the same time the Troika came to town,” says First Auto’s Managing Director, Frank Donnellan.

“Our entry to the market was hailed and universally welcomed by the Irish Motor Industry and we continue to enjoy this loyalty going into 2017. We are here for the long road and won't be dipping in and out of the market when it suits. Like the slogan says "we were there then, we're here now". We are totally committed to this market and our sole distribution channel is through motor dealerships. Thanks to Irish motor industry we are now the largest independent motor finance company in Ireland. We provide financing solutions to consumers and non-consumers (SME's and Corporates) for new and used cars and light commercial vehicles”.

Ray Murphy, Sales Director, says: “The landscape in 2011 was unrecognisable from today. We saw a decline in car sales for the following two years and it was only in 2014 we started to see a slight recovery.”

Graham McLoughlin, who heads up the company’s used car finance business, remembers those days when only 30 per cent of applicants were accepted for finance. Now he says “almost 75 per cent of all proposals received are accepted and this number is increasing each year. We are looking forward to 2017 and another record year for the company”.

“In 2011, we financed €25m and this year we will write almost €230m, while I expect next year we will write in excess of €250m. In 2011, we employed three people; now that number is close to 50,” Donnellan states with an obvious sense of achievement and pride.

“The Irish motor industry supported us from day one. We thank them and look forward to their continuing support.”

Regarding the effect of Brexit, First Auto Finance is cautious, but not panicked. Unquestionably the recent decline in the value of sterling against the euro has led to an increase in secondhand imports from Britain. Analysts expect continued volatility in the short to medium-term.

“Irrespective,” states McLoughlin, “we would always advise customers to purchase a new or used car from a respected and trusted Irish dealer, where they can be certain of a warranty that will be honoured in the event of an issue with the car. It is definitely a case of buyer beware if not purchasing from a trusted Irish dealer. We have all heard the stories of individuals travelling to the UK and inadvertently purchasing clocked or crashed cars, and in some instances, former taxis.”

Regarding new car sales in 2017, First Auto Finance is realistic. Ray Murphy points out “we were here in the dark days of 2011 and indeed 2013, when 74,000 new cars were registered, and while there may be a pause in the growth of recent years, we expect there will be north of 135,000 new cars registered”.

While PCP has been available in Britain for over 20 years, it is a relatively new method of finance in Ireland and it has been partly responsible for the significant growth in new car sales. First Auto Finance has been a pioneer in this regard and is the only company offering this method of finance across all brands, new and used. PCP is not for everyone but for the right customer, it’s a great finance option.

Donnellan explains: “PCP allows consumers drive better cars for a lower monthly payment than traditional loans available from banks and credit unions. There are lower monthly payments because the future value of the car is guaranteed, and factored into the calculation. We expect PCP will continue to fuel the growth in new car sales, but also in the used market. We have been offering PCP to Irish consumers for over three years and have witnessed massive growth in this area and expect strong demand through 2017 for both new and used vehicles.

“In simple terms, the customer pays a deposit of between 10 and 20 per cent followed by 36 reduced monthly payments. At the end of the contract, the customer has choices. They can return the car to the dealer, alternatively pay the GMFV [Guaranteed Minimum Future Value] and keep the car or part-exchange with their preferred dealer and drive away in another new or used vehicle. We are now seeing many customers exercising the third choice and we are delighted to be financing their second PCP and expect this trend to grow extensively through 2017.”

“At First Auto Finance,” Donnellan explains, “we are optimistic for 2017 despite the uncertainty over Brexit. We believe Irish consumers and businesses are confident about the future and that uncertainty is becoming less of an issue. The economy is on the up, unemployment is under control and recent numbers are highly impressive.”

“First Auto Finance, the exclusive business partner of Close Brothers Motor Finance in Ireland, has ample funding available for consumers and non-consumers alike to enable them purchase a new or used car in 2017. During November, we are seeing significant activity for January sales and believe this augurs well for an extremely buoyant start to the New Year.”