DBRS Publishes “U.K. Autos: Elongated PCP Terms Increase the Risk of Voluntary Termination” Commentary

DBRS Ratings Limited (DBRS) released a commentary on U.K. Auto ABS transactions focusing on the use of the personal contract purchase (PCP) terms. DBRS has observed an increase in the use of PCP agreements in the U.K. over the last ten years.

The use of PCPs has evolved over this period with the product now regularly used to finance new and used vehicles, while contract terms have also widened. In DBRS’s view, the extended duration of these agreements creates an increased risk in the auto financing market of voluntary terminations.

Further details can be found in the commentary "U.K. Autos: Elongated PCP Terms Increase the Risk of Voluntary Termination” published on 1 May 2018.

DBRS will continue to closely monitor developments in the U.K. auto market and their potential impact on DBRS-rated deals.