G3 Remarketing has said it is seeing a record number of voluntary terminations (VT) for PCP and HP agreements.
The remarketer said it deals with and disposes with nearly 1,000 VTs each month from a broad range of funders, and has seen a 35% year-on-year increase in the number of these cars going through its auction.
G3’s director Matt Dale said: “The PCP model has forced a shift in the UK motor industry, with 60% of new cars now being bought via this method. These figures aren’t set to fall any time soon.
“People are simply changing their cars more often than they ever have, and don’t want to be held back by finance agreements.”
Dale added that this is having an impact on the used car market. He said: “There’s no disputing the fact that values of used cars are falling. Ultimately, consumers are wise to the affordability of PCP agreements, so they now also expect to pay less for a used vehicle.
“Dealers therefore need to protect their bottom line by considering other ways to maximise margins. For example; sourcing stock via auction; using experienced but reasonably priced mechanics to prepare vehicles for sale; and upselling add-ons, such as warranties and GAP insurance.”