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Realism needed in point of sale finance market

Dealers are being urged to accept a dose of realism in the point of sale finance market.

Black Horse managing director Chris Sutton said the market conditions were unsustainable before the recession and now the market was working in a more realistic way.

He told AM: “Over the last two or three years the returns in this business have not been sufficient and because of the constraints of capital and its high costs there now needs to be a dose of realism in terms of the price the customer pays for credit. 

“There has to be a lower share of the profit pool that dealers can make. The margins expected by all finance providers is more than it was 12 months ago. Dealers must be confident to pass on the rise in credit prices to the customer.”

Sutton said Black Horse will be supportive of dealers who sell
finance at the right price and in a “true partnership”.

He said: “There is no alternative because if there isn’t agreement we would not continue to be a significant player in the market.”

The point of sale market is now more competitive in terms of the charge rate to the customer. 

The competition from direct lenders online has dissipated, Sutton said.

This has led to a much more realistic market. “I’ve changed my attitude in the last 12 months where now I’m a lot less concerned with volume of business and more concerned with returns and a sustainable relationship with dealers who aren’t just interested in getting the best deal from you this week.”

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