First Auto Finance chases pole position

FORMER BANKER Billy Kane is back at the wheel, providing auto finance in the Irish market.

Kane, a former chief executive of Irish Permanent, is a major backer of First Auto Finance Ireland Ltd, which started business in February.

Managing director Frank Donnellan said First Auto hoped to finance the purchase of about 3,500 vehicles in its first year and has partnered Close Motor Finance Ltd in the UK, which will provide the customer loans.

“They [Close] had an appetite to look at the Irish market again; they see a long-term opportunity here,” Donnellan told me.

With loans averaging about €15,000 a pop, this amounts to lending of €53 million in a full year. First Auto’s interest rate is 9.1 per cent.

To start the ball rolling, it has secured a deal with Subaru to provide customer finance to its dealerships here. It’s a small toe in the water (Subaru sold just 224 cars here in 2010) but other deals are in the pipeline.

“We’re talking to a few other [motor] groups at the moment,” Donnellan said.

Kane has a good track record in this business. He was a senior executive with Woodchester when it was burning up the road back in the day, while Irish Permanent was the biggest player in car finance under his watch.

Times have changed, of course. Bank of Scotland, GE and Lombard have either closed or scaled back their auto finance activities here in the recession.

“There’s a gap in the market and we hope to fill it,” said Donnellan, who previously also worked for Woodchester, as well as Bank of Scotland and Honda.

Car sales collapsed when the bubble burst, but the Government’s scrappage scheme boosted sales by 54 per cent to 88,373 last year. The scheme ends in June but Donnellan is confident First Auto can motor on.

“We’re not going to see the dizzy heights of the boom years again,” he added, “but we can get back to a level of 100,000- 120,000. That would be a good result, probably for 2013/14.”

First Auto is a subsidiary of First Ireland Finance plc, a UK- registered company previously quoted on London’s Aim market.

First Ireland owned Ship, which provided equity release products for senior citizens here but was credit crunched.