The continuing shift away from new to used car sales is prompting more franchised dealers to rethink their motor finance lending panels, says Startline Motor Finance.
The company says that there is a realisation that changing conditions in the market mean that the products being offered to consumers should better match their needs.
Startline’s chief executive Paul Burgess (pictured) said: “We have definitely seen numerous franchise groups realise that they need to rethink their overall motor finance proposition. Many of them are used to simply working with their captive lender on new car deals and a prime lender on used.
“However, with the accent in the market moving increasingly onto used as the new market falters, there is quite a lot of change to manage. For most, it is not just a question of selling more used cars but the average age of those vehicles has also increased.
“The kind of customers they are working with are often different as a result. While some used car buyers are people who are moving over from new, others are entering a franchise dealer for the first time because of the price and age of cars now on offer.”
The outcome, said Burgess, is that these dealers are starting to construct more flexible lending panels that meet the needs of a wider range of vehicles and customers.
“To some extent, this is about introducing motor finance providers who are happy to offer HP and PCP on older cars, in an area where franchise dealers wouldn’t normally operate.
“However, it is also about customers who do not necessarily fit the normal franchise dealer buyer profile, which is where we have been making some strides in penetration thanks to our flexible proposition.
“Increasing numbers of car buyers who walk into franchise dealerships don’t fit some of the requirements of prime lenders. They might rent rather than own their home, for example, or have more than one job, or be self-employed.
“Where we have been able to help is in being able to offer competitive HP and PCP options to many of these people, who would otherwise probably have been passed to sub-prime lenders, with the highly unfavourable interest rates and terms inherent in doing so.”