Australian Automobile Dealer Association (Vic), the new car division of the VACC, is keeping a watching brief on the effects of Ford Credit’s announcement that it is to withdraw retail finance services.

Ford Credit will no longer provide finance to private car buyers in Australia from February 28, 2009.

“While this is not good news, the withdrawal of retail services by Ford Credit is not as bad as it sounds,” VACC spokesperson Murray Collins said.

“Three months ago, GMAC and GE Money announced they were pulling out of wholesale credit finance. This was a serious threat to new car dealers as there were only a limited number of alternative players in the ‘floorplan’ market.

“However, in this case, new car dealers have more options when it comes to finding new retail credit to offer consumers. Therefore, while it is a headache and an unwanted distraction, we anticipate that dealers will be able to source alternative retail finance without too much disruption.

“Dealers will also be relieved to hear that Ford Credit has indicated that is committed to providing wholesale finance.
 
“But AADA (Vic) and VACC is disappointed this situation has occurred. We consider the six week’s notice period to be too short and unreasonable. It puts dealers under pressure to find new retail credit when they should be concentrating on doing what they do best: selling cars.

“Firstly, we are calling on Ford Credit and the State and Federal Governments to consult with dealers and make every effort to extend this deadline.

“Secondly, we recommend Government paves the way for new financial institutions to enter the dealer retail and wholesale credit markets, therefore providing dealers and consumers with increased options.

“AADA (Vic) and VACC are liaising with new car dealers to understand the implications of today’s news. We will continue to listen to dealers concerns and provide assistance,” Mr Collins said.

Source: VACC