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More needs to be done to meet the requirements of diverse groups of used car buyers, says Startline.
The company has claimed that more products are needed to accelerate the motor finance sector towards providing a spectrum of options that meet the needs of customers at all points of the market.
These changes include adding near prime options because the market generally consists of mostly prime and non-prime lending.
Paul Burgess, CEO, said that Startline has done this, adding: “It’s an achievement and serves an important need for dealers and car buyers but, essentially, we’ve only moved the choice from two levels of finance to three.
“What is clear to us is that there is a much wider spectrum of finance needs in the market. Quite how many is difficult to say but it would not be a stretch to suggest that the market should perhaps be operating over at least five identifiable levels that are easily understandable to dealers and car buyers.
“It’s not just a matter of providing a kind of single sliding scale to cover different levels of risk – that’s an approach driven by finance provider thinking rather than customer needs.
“Instead, it means developing an understanding of different groups of customers with different requirements and delivering products that meet those desires.
“Not only would such an approach be better for everyone operating in the used car sector but it would very much fit into the way that the FCA views the market, giving them a wide choice of effective products to find the solution that fits their needs.”
Recent research by Startline indicated that two out of three dealers (66.1%) believe that near prime finance will become more important to their businesses if there is a recession in 2020.
Burgess concluded: “We now have dealers operating in mainstream sections of the used car market where perhaps a fifth of their business is being written as near-prime.
“There is a definite need for this kind of product and it is quite clear, from our viewpoint”