If you’re active in the high value car sector, you may have found some of your customers having trouble finding the vehicles they want. There is currently high demand for both new and used prestige and classic cars, and a shortage of both. Severe delays caused by Covid related production stoppages and new Brexit protocols are a key factor in the supply of new, low volume cars with 12 month waiting times for new imported vehicles not uncommon. This has led to many buyers turning to the used market, and this has bolstered pre-owned values and competition when vehicles are put up for sale. Being able to move quickly can be the difference between your customer getting the wheels they want, losing them to another buyer or worse, losing the deal to the vendor.
Although buyers are having to pay a bit more to secure the cars they want quickly, the upside for owners is that strong residual values mean now is a great time to refinance. Some customers are releasing capital to add to their car collection whilst others are investing in new business opportunities. Whether buying or refinancing, it pays to work with a funder which understands the asset, the market and has a credit team with the time and the inclination to consider ‘story’ deals.
Take this one for example, which came into Credit Manager, Giles Hussey. Oracle came to him with a customer wishing to purchase a 2019 Ferrari 812 Superfast. The deal was unusual for two reasons. The first being that the customer required the finance on an interest only basis, and the second that although he was a UK resident, he was employed abroad. Both factors could easily mean a decline from many funders. Giles, however, took the view that as the customer was willing to put down £127,000 of the £247,000 purchase price and had a substantial income, albeit from abroad, a £120,000 balloon after 36 months was a deal UTB could do.
Peter Brook, Managing Director, Oracle Finance, said:
“At Oracle, we are used to dealing with HNW clients with complicated backgrounds however, this particular transaction was more complex than most. We were approached by an existing client, who had moved offshore since our last transaction, wishing to purchase a Ferrari. He was paid through a foreign bank account in one currency then transferred these funds into GBP in an offshore UK account. For most lenders, this would have made the deal a non-starter. However, because of our knowledge of the customer and his background, we felt that there was a deal to be done. We approached United Trust Bank, firstly because of their ethos, that they want to do business, and secondly, their underwriters have the expertise to take a
commercial view on a proposal. After speaking directly to Giles, and supplying a small amount of further information, the deal was done, and we had a very satisfied customer.”
If you have a customer wishing to purchase a prestige or classic high value car, please get in touch to discuss how we may be able to help.