Manheim is launching a vehicle stock funding programme in the UK next year called NextGear Capital UK.
The new service is aimed at small indepedent dealers which find it difficult to gain access to finance to fund stock. Manheim's US parent company already operates a similar service in the US.
Independent dealers will still visit Manheim’s physical or online auctions sites and be able to purchase stock, with NextGear Capital funding the wholesale value of the vehicles being purchased.
Dealers will not be charged until the car is then sold and NextGear Capital will then charge a percentage fee depending on how long the vehicle remains in a dealer’s stock.
Manheim told AM that the service was not aimed at franchised dealers, but some smaller sites might use the service.
It could mean that franchised dealers will be able to increase the speed with which they can dispose of part exchange stock which don’t meet their used car stocking policies with smaller independents looking to build up stocks of older vehicles. NextGear Capital is looking to fund 100,000 used cars in its first year of business in the UK.
John Bailey, chief executive at Manheim Europe, said: "Research undertaken by Manheim suggests that accessing finance is one of the top concerns for nearly 4,000 independent dealers across the UK.
“Market conditions are currently very buoyant, and we are likely to see an increase of supply returning to the wholesale market over the next 18 months. Therefore, to be able to offer a regular injection of liquidity into the market, NextGear Capital's stock funding programme will enable buyers to absorb more of this supply from vendors."
NextGear Capital will officially launch in Q2 2014 but will be open for applications from interested dealers as early as February 2014. Manheim is hoping to pre-approve the majority of independent dealers through the application process ahead of the launch next year.
NextGear Capital is based in Chester and is looking to increase its staff number “significantly beyond” that level in the future and is currently on a recruitment drive for the new business.