Dealers should consider pricing non-prime motor finance lower in order to win more business and question whether deals which demand high APR should be done, says Startline Motor Finance.

Frequently-seen pricing of anything from 25-40% APR means that customers are less likely to buy finance, chief executive Paul Burgess points out, as well as increasing the risk of default – losing any potential future business in the process.

Burgess said: “The pricing of non-prime transactions is often very high, something that we believe is neither appropriate and can be counterproductive.

“However, there has been something of a shift in the finance sector in the last year and we are seeing a small but growing number of dealers pricing non-prime much more sensibly.”

Burgess said that there is also an ethical argument for not writing business that forced people into very high levels of APR.

He said: “If you can only write the business by charging an APR of 30-40%, then there is a question mark over whether you should be writing it at all.

“Your potential customer is undoubtedly a poorer risk and has a higher chance of defaulting. Should you be part of that process?”