Next Gear Capital, the dealer stocking fund company owned by Manheim, has launched in the UK.
The new service is aimed at small independent 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.
Once a dealer has been approved for a NextGear Capital Stocking Plan they can buy cars or vans up to an agreed limit from the network of auction or vehicle wholesale partners signed up to the programme. Partners will start being announced later in April.
Manheim told AM that the service was not aimed at franchised dealers, but some smaller franchised 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.