Dealers and brokers should make the most of the
disjointed industry, says Graham Hill.
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I have never seen our industry so disjointed, with such little
enthusiasm and so few creative ideas. However, dealers and brokers
can capitalise on market conditions and the insecurity of banks and
customers – but only if funders and manufacturers communicate like
never before. That’s why I’m pushing forward plans to develop the
NACFB’s membership base to include dealers as well as brokers, to
work together for everyone’s benefit.
The more new cars provided by
brokers, the more provided by dealers, and the more used cars made
available to dealers to sell at affordable prices – it’s a
merry-go-round, not rocket science. Every time a dealer or a broker
loses a finance deal to the customer’s bank, based solely on the
APR the customer can get via the bank, is a sale that shouldn’t be
lost.
Banks have limited resources, and
customers, in turn, are restricted to the amount the bank will lend
them. So, there’s a strong case for both small businesses and
consumers to retain the available credit line through their bank.
Our job is to act as professionals and provide strong financial
advice. Even if the HP advance from your provider is a few percent
more than the bank, this should be explained as an essential
alternative source of funding that will allow the customer to keep
the bank’s low rate finance in reserve.
We should explain that, even if the
bank switches customers into leasing when discussing their car
requirements, this commitment will also be taken into account if
the customer needs a loan or overdraft. Customers need to be told
this, even if they are financially sound or their business has a
good current cash flow. There is also the legal strength consumers
and small businesses enjoy with HP that they don’t enjoy with a
business or personal loan.
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By GlobalDataAs for manufacturers and funders
talking, we need better lease rates that result in more cars and
vans sold that feed into the used vehicle sector. In order to
develop this sector we need a greater understanding on the part of
dealers about the mechanics of contract hire and PCH for them to
sell the products. I still see this as a great opportunity for
dealers and brokers. These special offers can also act as loss
leaders allowing you to open a Pandora’s Box of other vehicles and
finance.
Education is key to all this –
dealers and brokers should become better educated in the various
products available and then use what they’ve learned to spread the
word. Take a leaf out of Yes Car Credit’s book (almost 50,000 cars
per annum) and put finance first.
Graham Hill is motor finance director at NACFB
