Why car finance and sourcing stock go hand in hand

INSIGHT | 1 JUN, 2018

Let’s face it, the used car buying journey has changed.

Gone are the days when a buyer would wander onto your forecourt, kick a few tyres, see something they like, make you an offer and shake on a deal.


Nowadays if you have desirable stock then buyers are likely to arrive on your forecourt fully briefed, having spent hours online researching their next purchase.

These buyers are easy to spot as they’ll make a beeline for a particular car. They will know exactly what condition it’s in by the photographs on your website, they would definitely have looked at any video footage you’ve posted and they’ll know how competitively you’ve priced it by scouring through similar models on classified websites.

Buying a used car today is all about customer empowerment and if you have the right stock and can show you are being fair and transparent then you’ll be ideally placed to make it onto their shopping list.

Then you can start talking to them about finance. So, here are 5 factors to consider to help the process.

  1. Car finance has changed for buyers AND sellers

As a direct result of the financial downturn a decade ago, when banks reeled in their credit lines, car buyers are now far more receptive to funding their cars at the point of sale. Why? There are plenty of reasons ranging from the banks being slow to reopen their lending books to dealers using their funding suppliers to offer competitive monthly repayments, with low percentage APR rates, tailored to a buyer’s budget.

If you really want to grab the attention of buyers whilst they’re researching then you’ll definitely need a finance calculator on your website to help them plan their budget once they’ve found the car of their dreams.

  1. So just how big is the car finance market for dealers?

It’s huge! In 2017 over 2.3 million cars were funded by dealer finance at the point of sale, according to data published by the Finance and Leasing Association (FLA).

You might be surprised to learn that over half, 1,357,216, to be precise, were for used cars.

Furthermore, the FLA calculated the total value of advances made by dealers was £15.4bn a year-on-year increase of 12%.

Calculator and keys

  1. Isn’t selling finance hugely competitive?

Yes, but so is selling used cars! Also, what’s wrong with competition if you’re able to respond with the best deals suited to your customer’s budget? Online lenders may have filled the void left by the banks but dealers have also transformed the way they sell finance.

It started in the new car market where car manufacturer-backed low interest Personal Contract Purchase (PCP) schemes became the preferred funding choice for customers. The cost-effectiveness and convenience of PCPs is now being enjoyed by a growing number of used car buyers.

  1. Why rules on compliance are important

Anyone involved in selling finance will be well versed in the new rules on compliance introduced by the Financial Conduct Authority (FCA).

The rules safeguard the rights of consumers, as dealers selling finance can only do so by being authorised by the FCA.

It’s is all about dealers having robust processes in place to provide fair outcomes for buyers, ensuring they lend responsibly and that buyers can afford the agreed repayments.

  1. Time to review your stock

So, with franchised and independent showrooms able to offer a plethora of finance solutions to customers to help them buy their next used car, whilst ensuring they do so in an affordable manner, you need to make sure you have access to the best possible stock to attract them in the first place.

That’s where ADESA UPSTREAM can help by providing you with access to desirable vehicles at the beginning of their journey into the wholesale market, avoiding the hassle and expense of chasing them through the auction halls.

See how we’re revolutionising vehicle remarketing for dealers by registering with ADESA UPSTREAM today.

More time selling. Less time sourcing. And that’s got to be good for your bottom line.


You may also be interested in

Developing and deploying the digital solutions our customers want, need and value the most
We use NAMA grading to help you buy online with confidence

Get in touch for more information