The growing momentum in the used car market is prompting more franchise dealers to rethink their motor finance lending panels, according to Startline.
The company said that dealers are beginning to recognise that changing conditions in the market mean that the products being offered to consumers should better match their needs.
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“We have definitely seen numerous franchise groups realise that they need to rethink their overall motor finance proposition,” said Paul Burgess, chief executive of Startline. “Many of them are used to simply working with their captive lender on new car deals and a prime lender on used.”
According to Startline, an increasing number of car buyers who walk into franchise dealerships do not fit some of the requirements of prime lenders. As a result, dealers are starting to construct more flexible lending panels that meet the needs of a wider range of vehicles and customers.
This includes introducing motor finance providers who are happy to offer HP and PCP on older cars, in an area where franchise dealers would not normally operate.
“With the accent in the market moving increasingly onto used as the new market falters, there is quite a lot of change to manage,” continued Burgess. “For most, it is not just a question of selling more used cars but the average age of those vehicles has also increased.
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By GlobalData“The kind of customers they are working with are often different as a result. While some used car buyers are people who are moving over from new, others are entering a franchise dealer for the first time because of the price and age of cars now on offer.
“Where we have been able to help is in being able to offer competitive HP and PCP options to many of these people, who would otherwise probably have been passed to sub-prime lenders, with the highly unfavourable interest rates and terms inherent in doing so.”
