The bounce-back in used car sales since the initial lock-down measures were lifted has been encouraging for the motor retail sector. Increasingly, customer interest has been turned into action courtesy of dealer finance continuing to support dealers whilst other competing sources of
Mann Island Finance MD, John Hughes, is keen to ensure that dealers recognise that the positive approach to dealer finance as a facilitator of sales seen in recent weeks can pay long-term dividends, noting:
"In late September, Moneyfacts reported that 'since April getting accepted for a personal loan has become significantly harder'. Since June, at Mann Island, we have written record volumes of finance, primarily in the used vehicle sector. There has been a healthy trend by dealers to use finance as a marketing and closing tool with competitive rates being offered; the net result has been a significant increase in used car finance volumes."
Hughes is clear that the message of finance availability and competitive pricing can represent an essential building block to the future used car retailing model. It is a move that is being helped by what John views as a healthy increase in chassis prices driven by high buyer demand and limited supply as he concludes:
"Higher prices for cars have broadly been offset in monthly cost terms for consumers by the lower APRs dealers have typically been using in their promotional activity. As a result, finance penetration has been rising with dealers earning a little from a broader pool of customers. It is an approach that works for all parties in the short and long term as we approach FCA changes for motor finance.
"On January 28th, a new regime for finance pricing and a more stringent regime of commission disclosure will commence. The trends we have seen over recent weeks provide a positive illustration of how the post-January 28th car retail landscape could look. I, for one, am positive that the message of finance availability, competitive, transparent car and finance pricing, along with fair treatment can serve the sector well thus increasing customer trust, enhancing retention with lower acquisition costs and establishing a lasting role for finance as a profit centre."
*Article Source www.rocketperformance.co.uk