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More franchise dealers are rethinking their motor finance lending panels according to Startline.
This is caused by a continuing shift away from new to used car sales, leading dealers to construct more flexible lending panels that meet the needs of a wider range of vehicles and customers.
Paul Burgess, CEO of Startline, 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.”
Burgess says that the shift is about working with customers who do not necessarily fit the normal franchise dealer buyer profile.
He said: “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.”