2:32 pm, June 28, 2008
THE evidence is clear – the credit crunch is biting and more and more dealer principals are staring depressingly at sliding sales figures. Some have already gone to the wall, and not just the small, backstreet outlets.
The reason, however, is not so obvious. There is no shortage of customers out there wanting to buy cars. But now when they try to secure their desired new model, they find they simply can’t get the finance to pay for it.
According to Craig Rutherford, managing director of Affiniti Finance, the credit crunch has seen a number of high-profile lenders drop out of the market. ‘These disappearing has in turn had the effect of closing down small and in some cases large dealers. They can’t get the money for their customers to buy cars, and they can’t get the money to buy stock themselves,’ he explained.
Rutherford, however, believes firmly that dealers can survive the downturn and come out stronger on the other side – the crucial key is their levels of customer service, and that includes not only finding the customer finance, but a package that they will feel safe in accepting. This, he says, is where Affiniti can help.
He should know – it is through his many years in the industry that the idea that became Affiniti was born. Rutherford started as a salesman on the showroom floor, progressed to business manager level, then went on to work for lender Advantage Finance.
Running the broker side of Advantage’s business, and dealing with major lenders Halifax and Bank of Scotland, Rutherford saw swathes of applications coming in for car finance: ‘In many cases the banks couldn’t help, and these applications simply went straight in the bin.’
So he set up Affiniti as a complete service for customers. Firstly a suitable loan would be found, and then the car they wanted sourced from a reputable dealer: ‘It was a complete service, and very hard work to do, but it got results.’
Before long, personal loan brokers who couldn’t get finance for their customers were turning to Affiniti for help, while the dealers who were seeing their cars sold for them were very happy. Now the wheel has turned full circle, with the dealers relying as much on Affiniti as customers previously have.
‘We’ve looked outside the box,’ Rutherford told Car Dealer. ‘How can we help dealers sell cars? If they do they become stronger, which generates more business for them and for us. It is a self-fulfilling prophecy.’
Firstly, and crucially, Affiniti has the product, enabling a dealer to obtain the finance that will allow a customer to buy the car they want even in today’s difficult market – and these days that is often achieved effectively by the dealer applying for a personal loan on the customer’s behalf.
Rutherford explains: ‘While we started off on an HP basis, these days lots of customers are in negative equity, they can’t get the finance and have to look at other ways. Because of our association with the banks we are in what I believe is a unique position to offer a full range of personal loans to customers, with deeper levels of acceptance – we can place a sub-prime customer with the products that are out there.’
Rutherford contends, however, that offering the means to buy is only a part of what the dealer needs to do to secure the sale.
‘Today’s buyers are shopping around more and the experience the customer gets from the dealer is ever more important,’ he explained. ‘That level of customer service has to be complete, from the physical experience when they walk into the showroom to the confidence in the financial product the dealer comes up with.
‘In the past, customers have gone into showrooms having already been to their bank for finance, which suggests they were sceptical of the financial package the dealer offered – that has to change. To get the business the dealer has to make the customer feel safe in sorting their finances in the showroom.’
This is where Affiniti really scores, Rutherford adds, because it offers the highest levels of service at both customer and dealer level. ‘My company is actually called Dealer Support, trading as Affiniti Finance, because I’ve been there, I’ve sold cars and I will happily stand in a showroom and help the dealer sell cars.’
Rutherford also believes the current tough times will have a long-term positive effect. ‘The crunch is weeding out the cowboys both at finance house level and dealer level. The strong, those that provide the highest levels of service, will survive, because you and I will always need to buy cars. The sharks will be forced out.’
