Push finance on used cars in 63-plate boom, dealers urged

By Tony Willard

Lenders are urging dealers to boost their revenues with showroom finance as they sell cars taken in part-exchange on 63-plate first registrations. They say key factors include offering a wide selection of finance products, well-trained staff and using digital technology to its best effect.

Research from electronic systems provider Cisco suggests that 83% of global consumers prefer to research car information online rather than phoning or going to a dealership.

Mark Baird, Hitachi Motor Finance strategic business development manager, urged dealer staff to explore all finance options with every customer, even the few who plan to pay cash, however the first contact is made.

“Some dealers are very proactive on finance, others have a long way to go and are really missing out,” he said. “Increased demand for used stock finance provides an opportunity for dealers to rethink their approach to how they structure deals, while maintaining healthy profits.”

New car costs compete with used

DSG Financial Services sales director Mark Gow said a key challenge for most dealers presenting used car finance terms was very competitive offers on new cars.

“To stimulate registrations, some manufacturers combine ‘deposit allowances’ with low APRs, creating  a very low repayment for customers,” he said.

“A monthly repayment on, say, a 10-month-old car can be similar to what a customer would pay for a new one.”

Gow said DSG could enable dealers to offer used car buyers ‘new car APR’ terms. Low-rate PCPs are available on cars up to five years old and 5.9% APR HP on those up to age seven.