Carlyle Finance chief executive Mark Standish wants dealers to use showroom finance as a marketing tool and business opportunity as the Moneyfacts website reports personal loan rates are at a 10-year high despite a record low bank base rate.
His call came as the Finance & Leasing Association announced another gain in market share for point-of-sale finance.
Standish said: “Failure to act on the opportunity to promote finance positively will invariably impact car sales.
“Customers know that accessing a personal loan is harder and more exp-ensive than for many years. Concerns about sourcing funds could delay a purchase or drive them to a retailer offering finance. Retailers need to review their approach and skill levels when promoting finance.”
“Dealer finance can be quickly set up in the showroom and is therefore very convenient and pricing continues to be very competitive,” he said.
Moneyfacts said rates were being pushed higher because of fears that stretched finances were increasing the risk of customers defaulting on loans.
This concern was made worse by the lack of security on personal loans and because lenders were unable to offset low loan rates through the sale of payment protection products (PPIs).