UK car company faces plunging into administration – in business since 2005 | UK | News

A UK car company is teetering on the edge of collapse with the business facing a redress bill of over £50m. Blue Motor Finance who started operating in 2005 is understood to be lining up administrators in a bid to secure a rescue package.

Sky News reports that the independent provider of motor finance has lent over £1bn to over 120,000 customers. It is widely reported that accountancy firm EY has been drafted in to help bosses piece together a last ditch rescue plan and potentially oversee an insolvency process if no deal can be reached. If the company cannot be saved, the news website reports that it would likely fall into insolvency.

Industry insiders in motor finance said that Shawbrook Bank had ended a “forward flow” funding arrangement with Blue Motor Finance earlier this year, increasing pressure on Blue Motor Finance to find alternative sources of funding.

Blue Motor Finance offers hire purchase (HP) and personal contract-style car finance so customers can spread the cost of buying used cars over time rather than paying upfront.

The company has lent around £2.5 billion to more than 250,000 customers. Blue has yer to comment on the report, but Car Dealer says it understands that representatives have told retailers the claims of being on the brink of collapse are false.

That outlet said in one message it saw, a finance manager even told account holders that Sky had “fallen foul to misinformation”, suggesting rival car finance firms may have been behind the rumours.

On its website Blue says that iIn a short period of time, Blue has become one of the UK’s leading technology and analytics driven companies lending £2.5bn to more than 250,000 customers.”

The state in which Blue Motor Finance finds itself comes weeks after the Financial Conduct Authority said it would launch a £9.1bn consumer redress scheme, which is now facing several legal challenges.

The compensation scheme was established “help people who were treated unfairly when they bought a vehicle on finance”, the Citizens Advice website says.

The Daily Express has contacted Blue for comment.