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Lenders’ support on used cars

By Tony Willard

The 13-plate will boost March sales of new cars to the year’s largest in a month, which means dealer stocks of used units will be swelled by 2013’s biggest influx of part-exchanges.

Showroom loans for used cars are on the rise, but growth lags behind the increase in loans for new ones, so lenders are focusing on initiatives to help dealers boost sales.

Andy Gruber, director of Alphera Financial Services, said: “We are working with dealers to help them replicate strong new car offers also on the used car side of their business. APR-driven campaigns, using low monthly instalments in our PCP products, play an important part.

“Focusing a used car finance campaign only on a specific long weekend is very efficient in generating the necessary buzz within dealerships.

“In preparation, we recommend dealers target their existing portfolio of customers as a cost-effective way of generating sales without too high a marketing spend.”

Alphera, part of BMW Financial Services, provides showroom loans for car brands outside those manufactured by the group.

Gruber said dealers are encouraged to sell fewer used cars and instead work with Alphera PCPs, which cover stock up to five-years old cars with maximum terms of four years.

“This helps generate some additional income for the dealership, but more importantly to help grow the dealer’s customer base,” said Gruber.

Paul Harrison, Finance & Leasing Association head of motor finance, said: “Used car finance has consistently grown in the last three years.

"Lenders help dealers with flexible finance products, incentivised offers and free add-on upgrades.”

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