By applying lessons learned from High Street retailers, Hitachi Capital’s managing director Gerald Grimes believes dealers can grow both their finance business and increase sales.
With more than 30 years providing consumer credit for retailers such as DIY store B&Q, Hitachi Capital has developed the model to specifically cater for car buyers looking for funding from their supplying dealer.
Speaking at AM’s forthcoming Hit for Six Conference, Grimes will highlight some of the familiar funding concepts from the High Street such as zero interest and deferred payments, which has encouraged the growth of retail lending whilst providing value-for-money for the consumer. He will illustrate how these can be applied to automotive retailers to stimulate funding and develop incremental sales.
Tackling six major issues facing the industry – new cars, used cars, aftersales, finance, insurance and digital, AM’s Hit for Six Conference takes place on November 19 at Cedar Court Hotel, Wakefield.
Grimes said: “By focusing on the customer and not the asset, finance take-up and ultimately sales are boosted.
For example, if as a lender we question the cost of the asset, we create negativity between us and the dealer. If we say we will only lend up to £7,000 for a car and the price tag is £8,000, the deal is lost. Instead, we should be focusing on how much the customer is able to and willing to pay on a monthly basis. I have no idea of the value of laser eye surgery yet we provide loans to consumers to fund it, so why should we as lenders try and dictate how much a car is worth?
“For us, it is simply overlaying many of the principles from High Street consumer finance onto vehicle funding. We are diversifying the experience we have gained from the High Street and applying it to vehicle loans and there’s no reason why some of those well-know finance promotions can’t work just as well in automotive retail to attract more custom.”
Grimes will also explore the impact of the Financial Conduct Authority (FCA) which promises a stricter regime with consumer protection at the heart of its ethos when it takes responsibility for consumer credit activities on April 1, 2014.
“The FCA promises to be significantly tougher than the OFT and that will pose a challenge for most dealers,” said Grimes. “Sales practices, affordability, the appropriateness of certain funding and the way in which lending is facilitated will come under scrutiny.”
Aimed at time-poor senior managers and directors, the conference is also particularly helpful for sales, business and afersales managers who are preparing to take on a dealer principal or general manager’s position as well as employees who play an overall role in the dealership such as accountancy staff, HR and marketing managers.