There could be many reasons for this, including the recent situation with Northern Rock, but what is obvious is that customers may be realising that dealer finance is now more competitive.
Direct lenders have been just as affected by the fallout from the credit crunch as any other lender but Northern Rock in particular, has been affected more than others.
What’s certain is that Northern Rock will probably no longer be able to offer the cheapest rates in the market.
Other direct lenders, who have looked to Northern Rock as a benchmark for rates, may find themselves putting up their own rates to match.
Therefore, point-of-sale finance may now become even more attractive.
What’s important is that we take advantage of this situation, and ensure that each and every customer is presented with a finance quote.
The choice of products that dealers can offer, including hire purchase and PCP, should make point-of-sale finance more attractive to customers.
Dealers must learn not to pre-judge customers.
The speed, ease and convenience of point-of-sale finance and the fact that the customer is in your showroom should be incentive enough to at least offer them a quote.
Much of the consumer nervousness last year was due to increasing interest rates impinging on their disposable incomes.
However, recent reductions in the Bank of England rates, and predictions of further cuts throughout 2008, should help to steady consumer confidence.
But, it’s more than just rate!
It’s as much of a mindset issue, with the customer who may think that point of sale finance is uncompetitive, and the dealer sales staff who think that the customer already has finance in place.
Both these issues have to be addressed, and a positive approach to the way we promote and sell finance will only maximize the profit opportunities available.
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