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The rise of no interest

Time 13 years ago

1022172_34255882.jpgZERO per cent finance is going to grow in popularity, as manufacturers target it as a key incentive.

Suzuki’s product manager, Rob Lake, says makers with strong finance providers will use whatever leverage they can to drive interest-free credit.

‘Right now, there’s nothing more attractive than the offer of free money.’

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Such incentives do cost more, admits Lake. ‘It’s more expensive, but we have to sell cars – and, with one financial crisis after another, this is becoming more and more of a key offer.’

Interest-free finance not only saves customers overall, but also reduces monthly payments. More crucially, it sends out a strong message that manufacturers can still source and offer finance – the double reassurance is a very marketable selling point.

Lake says that the advantage here lies with makers boasting well-backed financiers. Suzuki uses Lloyds TSB. Such financial clout adds flexibility to marketing teams’ plans, allowing incentives to be better-targeted.

Those selling cheaper cars, he adds, will also be advantaged: sourcing finance on a £6000 model is far easier when funding is in short supply.

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But, he adds, it is a two-way thing. ‘Money is expensive for manufacturers, but it also is for customers, too.’ To sell cars, dealers should realise that while things are tough for them, they also are for buyers…

By RICHARD AUCOCK

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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