SQUEEZED margins on used cars are prompting dealers to make efforts to maximise motor finance penetration, says iVendi.
With values of high quality stock remaining high but retail prices under pressure, there is a definite increase in activity designed to create additional profits around the sale of the vehicle, said Chief Operating Officer Richard Tavernor
He added: “Many dealers are finding it tough to maintain a good level of profitability from simply selling cars and it looks as though this situation will persist for a while, with no real sign of the used market losing its buoyancy any time soon.
“Therefore, there is a lot of interest around other revenue streams. The most important of these is motor finance and we are seeing definite efforts to increase penetration both online and in the showroom.”
Richard said that this trend was being seen in a number of ways – from ensuring lending panels were offering an appropriate choice of products through to promoting motor finance at every possible opportunity.
“Certainly, we are seeing some reviewing of lending panels going on and an accent on providing a good spread of products designed to meet changing customer needs, especially when it comes to used car PCP.”
He added that the main thrust of activity is occurring around creating a strong link between motor finance and the vehicle both online and in the showroom.
“For instance, a simple change that works well is to have an illustrative finance example shown alongside the vehicle whenever the customer views a page.
“This doesn’t just underline the affordability of the vehicle but provides a click through for the buyer to find out more information about the finance product and progress their interest by using a calculator, prequalifier and even to make an application.
“Technology can be used in a similar way in the showroom. For example, allowing customers to access motor finance tools online while they are looking at a vehicle provides them with the means to take greater control of the process by letting them work through the options available in their own time.”
Tavernor said that iVendi had been working with many of its dealer customers to help them increase motor finance sales during later 2018 and into the new year.
“One of the areas in which we have invested heavily over the last year is customer support. We are in ongoing dialogue with all our dealers, providing regular input which, amongst other things, helps them look at ways of revising their sales processes and online presence to help them achieve better results using strategies that we know have worked well elsewhere.”