“The appetite for new car finance, especially with such competitive manufacturer deals, continues to remain strong. Many new cars are offered with economical monthly payments delivering good value and flexibility to consumers.”
Franks said the used car sector was also seeing positive growth: “Penetration for finance varies from dealer to dealer, but there is plenty of opportunity for most retailers to look at expanding their used finance product range with even greater innovation and flexibility.”
He said some traditional used car buyers were wooed into a new vehicle because of finance offers, but a proactive dealer could ensure balance in their portfolio by delivering strong penetration through attractive offers.
“Ultimately, it is down to the business plan of the dealer and ensuring they achieve the optimal mix of new and used customers for their particular business growth strategy,” said Franks.
Paul Kaye, Close Motor Finance sales and marketing director, said: “New car loans have had an impact on nearly new traditional used car customers, with manufacturer finance offers playing a huge part in this.
“Used car prices have held because of a shortage of stock until quite recently, so the difference between new and used car stock cost hasn’t been that great. Providing the right used PCP product should help in this space.”
Jason Nicholls, head of portfolio performance at Black Horse, said there was limited data to categorically prove people planning to buy a used car switched to a new one.
“Intuitively, this will be the case for certain customers,” he said. “It applies particularly where offers available on new cars mean they are as affordable in many cases as used cars with the potential reduction in overall running costs.”