“Arranging a loan has to be an integral part of the used car team, not an afterthought add-on when the deal on the car has been finalised,” said McMinn.
“Used car sales are part of the heartbeat of a dealer group and providing finance should be as well.”
There is a good reason for that: last year Benfield sold around 10,000 used cars against about 7,000 retail new ones. McMinn said used car sales are treated almost like a separate business and all necessary resources are provided.
Benfield, like most franchised dealers, has a higher proportion of bad debts on used car finance than on new because, says McMinn, of the nature of the people who enter agreements on them.
He said Benfield’s approach was based on building trust with buyers of used cars, so that they return for another, or for a new car next time.
“It’s best to try to achieve some flexibility around the size of monthly repayments – most people say a figure but know they will spend more if a used car they see attracts them.
"We try to avoid customers getting a slightly distorted view of what they can afford, which can lead to them leaving without buying a car and feeling discontented.”
Benfield’s main source of loans is Volkswagen Financial Services. Two years ago the group changed from Black Horse to Santander as its preferred independent loans provider. After that comes RCI Financial Services.
“VFS has bundled other F&I products with loans,” said McMinn. “These include service plans with used car loans, which suits us because we keep in touch with the customer.
“We like working with Santander, which allows us to write our own loans business and has a flexible approach.
"We can increase efficiencies and cut costs – these are essential to enable Santander to offer competitive rates.
“We tend to perform better than Santander expects us to and we don’t allow the bank to dominate us.”
MotoNovo Finance likes to work with dealers but believes sales of used car finance are overlooked too often.
Chief executive Mark Standish said dealers must look deeper than the headline success of new car finance.
He said it is important that the steady increase in new car finance is replicated in used car departments, where special schemes are often not in place.
“Our goal is to increase total dealer lending activity, ensuring dealer finance is recognised as the best for new and used cars,” said Standish.
“This will require a total commitment from dealers and finance providers.”