9:50 am, May 4, 2020
Used car dealers wanting to make as many online sales as possible in the near future will need widespread availability of motor financing.
That’s according to Startline Motor Finance, which says many providers had essentially shut off new business at the start of the lockdown, furloughing staff as they thought vehicle sales would be almost impossible.
Chief executive Paul Burgess said: ‘The clarification from the government on home delivery and the likely adoption, following that, of click-and-collect models mean that many dealers who had essentially mothballed their businesses are now looking to put a lot of effort and resources into online sales – and to get up and running as soon as possible.
‘However, the role that motor finance has to play in this scenario has not really been widely discussed. The majority of car sales are enabled by products such as hire purchase and personal contract purchase, and they will be needed to make sales possible.
‘To make this work, two issues need to be tackled – integrating motor finance into online customer journeys and ensuring that providers are currently offering services.’
Startline had stayed fully operational during the crisis, he added, and had been writing ‘surprisingly high’ amounts of business. Investments in online technology had also played a key role.
‘For some of our largest introducers, for example, we saw April deals running at around two-thirds of the normal level.
‘Overall volumes were substantially down but we have found that staying open has been the right decision. This has not been a dormant market.
‘Of course, all of the business that we have seen has been written online. There are no other routes to market at the moment, so digital capabilities have been essential.’
He added that it was difficult to predict the level of online sales during lockdown but they could be an important lifeline for dealers.
‘Our view is that, even if you are retailing only 10 to 20 per cent of the vehicles that you’d normally manage then, as long as you are making money, it is very worthwhile.’
Burgess said that for some dealers those handful of sales could make the difference between surviving the crisis or not.
More: Coronavirus crisis could radically alter motor finance sector, says Startline
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