Finance profit will be key to car retailers’ efforts to realise greater profit from used cars in 2019 as FCA scrutiny and greater influence from the market’s ‘disruptors’ continue to apply pressure.
According to Karl Werner, deputy chief executive of MotoNovo Finance, the business behind findandfundmycar.com, the used car sector will continue to serve-up impressive margins for those who collaborate well and continue to embrace a growth trend in the finance sector.
Werner said: “Looking at current market conditions; the continuing emergence of market disruptors and what now looks set to be ongoing political jousting, dealers should prepare themselves for what looks set to be an even more challenging market.
“In challenges there are threats – but also opportunities - and we believe dealers can take advantage of these in the year ahead.”
In 2018, new car sales declined to pre-2008 levels while in unit terms, used car sales in Q3 reflected a year-on-year decline in volumes of 2.4%.
However, figures from the Finance & Leasing Association (FLA) showed that the number of used cars sold on dealer finance in the 12 months to November rose 7% to 1,454,568 while their value surged 13% to £17.5bn.
In the same year, dealers working with findandfundmycar.com saw a 13.5% uplift in finance volumes compared to the previous year, as the platform delivered a total of 55,000 finance proposals for its supporting dealers.
A year on from the launch of findandfundmycar.com, over 2,600 dealers are now offering more than 137,000 cars on the platform and the site has expanded to include LCVs and bikes.
Despite his business’ growth, Werner encouraged dealers to be prepared for the continuing impact of product supply, the emergence of Ultra Low Emission Zones (ULEZs), the outcome of the FCA review of motor finance, the continuing impact of Brexit, and increasing competition for car sales and customer data.
He added: “Gaining sales and profit in the year ahead will become increasingly demanding and I encourage dealers to rise to the challenge and change the way they operate.
“Given the pace of change and resources available, dealers should look at who they can collaborate with to maximise their joint skills and meet the changing demands of today’s car buyers.”