To compete with tighter credit requirements Mazda has become the latest car company to start its own finance division.
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Mazda is poised to expand its finance division in an attempt to address tighter credit requirements, one of the contributing factors to the biggest market slowdown since the Global Financial Crisis.

Mazda Finance, which has already been rolled out to more than half of Mazda’s national network of 140 dealers, will also give the company an opportunity to offer guaranteed future buyback prices on trade-ins from early next year.

“Once people understand what that means, it does mean cheaper repayments and you can change your car more often. And that’s good for the consumer and that’s good for us,” says Mazda Australia head of marketing, Alastair Doak.

Mazda says the establishment of its finance arm was not in response the recent Banking Royal Commission, which introduced a raft of tougher measures to better protect car buyers, and that it had been in planning for some time.

Mazda dealers are still able to help customers arrange their own finance using other lenders or outside suppliers. Mazda customers can also make their own finance arrangements.

But Mazda Finance could end up delivering sharper deals as it brings new competition to the lucrative segment. In some cases, dealers make more money on the kickbacks from finance deals than they do on the sale of the vehicle, which means it pays for buyers to compare finance offers as well as the drive-away price of the car.

The two biggest in-dealer automotive lending institutions are St George and Macquarie Finance, although car companies such as Toyota, Holden, Nissan, Volkswagen, BMW, Mercedes, and Audi also have their own branded financial divisions.

More competition gives car buyers a greater choice and, hopefully, a better deal. Mazda says its Mazda Finance division will give customers the option of returning their vehicle after three or four years and swap into a new one at no or minimal extra cost.

Meanwhile, Mazda Australia has forecast the new-car market will end the year about 8 per cent down on last year, but remain stable next year.

Mazda sells the highest proportion of new cars to private buyers than most other brands in the Top 10, and closely monitors changing consumer trends across the industry.

“We believe the big falls are hopefully behind us now,” said Mr Doak. “We expect the market will stabilise next year. It will take a while before we see record results again but we expect the market to start to recover next year.”