DEALER motor finance is in the ascendancy.
Last month, exactly half of all new car purchases were bought using POS dealer finance. This is a big jump from 46 per cent the year before.
What’s driving this? Increasing attractiveness of dealer finance, coupled with banks clamping down on their lending criteria. The industry is becoming more competitive, just as people are starting to turn in droves to it.
It’s easier to get finance through for customers by this route because agreements are usually secured against the car. Specialist motor financiers can therefore be more flexible in the terms and products they offer.
This means the products are stacking up very well indeed against less competitive offers from banks.
Most still go for HP, but leasing and PCP schemes are growing: they’re up 27 per cent and 18 per cent respectively.
You can point customers confused by finance, and looking for some independent advice, in the direction of the Finance and Leasing Association. The FLA has a website – www.financingyourcar.org.uk – which gives a guide to car buyers on the different finance options available to them.
There is even a ‘finance decider’ tool, to advise people on which product best suits their personal circumstances.
