An increasing number of dealers are turning to asset-backed finance to boost their used car sales, according to recent research from Caerus Capital.
The company has seen a 64% rise in dealers looking to offer a finance application on their own site over the last six months. There has also been a surge in sub-prime car finance applications, up 76% year-on-year as more consumers are being declined prime products.
The most recent figures from the Finance and Leasing Association show that last year, £32bn of credit was for car finance, which supported the purchase of over 93% of all private new car registrations.
The car finance industry has grown significantly over the last decade and increasingly consumers are buying new, as well as used cars, on finance.
Many start their car buying journey online and once they find the make and model they want, they research finance options. If a dealer website does not feature a range of finance options that are easy to find and understand, the consumer is likely to go elsewhere for the right deal.
Ben Maguire, commercial director of Caerus Capital, said: “Increasingly, used car dealers are looking for ways to boost sales through car finance. To deliver this, dealers need to provide transparent, consumer-friendly information about the finance products and options available on their websites.
“Quick and easy-to-complete online application forms allow consumers to apply for finance from the comfort of their own surroundings and at any time of the day. Forms need to be simple to boost the number of applications, but they also need to capture all the essential information, to ensure it is a quality application.”
Recent research from Caerus Capital revealed that demand for mid to sub-prime car finance grew by 112% across the last 12 months.
Sub-prime borrowers taking out credit cards also grew by 143% between August and September last year, according to analysis from the credit reference agency Equifax.