GETTING their online motor finance offering right will be crucial to the profitability of many used car dealers in 2019.
That’s according to iVendi, which says that since making a worthwhile margin is increasingly difficult because trade prices are so high, dealers will rely more and more on finance to make a profit.
James Tew, pictured, chief executive of the online motor finance technology specialist, said: ‘We are seeing a convergence of two trends. One is that more customers are completing some or all of their used car purchase online, including motor finance.
‘The other is that motor finance is becoming more and more important to dealers who are faced with a market where trade and retail prices have moved ever closer.
‘What this means is that dealers increasingly need to look to online motor finance and make sure that they are offering something appropriate to their customer base – but this remains an area where the quality of what dealers offer varies widely.’
Tew said that even the smallest independent should now be offering some form of finance calculator, while larger businesses should have comprehensive processes that let customers look at different products plus a range of lenders, check their eligibility, and make their application and complete the documentation online.
“It is an obvious statement, but the dealers who put the most effort into online motor finance are the ones who get the best results.
“What we find time and again is that there is a large group of used car buyers – around four out of five, according to our research – who are confident about the prospect of using online motor finance. However, the majority of those consumers believe that the motor industry lags behind others when it comes to online.
‘In 2019, we may be reaching a point where dealers will no longer be able to afford to ignore the opportunities that online motor finance offers if they want to continue to make a decent level of profit.’