Motor vehicle loans have surged by more than 250% over the past year, a specialist asset finance aggregator has claimed.
According to a recent analysis of NLG Leasing’s portfolio, commercial and private motor vehicle purchases increased by a massive 263% in November, compared to November 2014.
NLG Leasing’s director of aggregation services, Frank Crombie, said the surge in motor vehicle sales is linked to the property market.
“This can be directly attributed to the continued strength in the property market and its flow-on effect on general consumer confidence,” he said.
It can also be a result of consumers becoming more aware and savvy when it comes to their finances.
“Consumers are increasingly savvy and are favouring financing structures, such as novated leasing, that enables upfront use of an asset without the risk or pressure of a sizable upfront payment. This model also enables the redirection of cash-flow into other areas,” Crombie said.
It isn’t just personal motor vehicle sales on the rise, though. NLG Leasing has also seen the commercial market demonstrating strong demand for motor vehicles for business purposes.
“In particular, SMEs are continuously seeking alternate financing solutions. Vehicle acquisition through a leasing structure is a smart alternative that allows the reallocation of funds to other areas of the business that can have a positive effect on efficiencies, productivity, sales, and ultimately growth,” Crombie said.
This leaves brokers with a significant opportunity to diversify into asset finance, says Crombie.
“Diversification into equipment and car finance is a natural extension of the home loan process. It enhances client relationships, increases revenue and provides a competitive advantage in a highly aggressive market.
“We encourage brokers to simply ask their client about their current assets and financial goals to determine if they’ll benefit from asset financing.”