Contrary to recent concerns expressed by
several companies in the broker sector, reports from industry
bodies suggest that enthusiasm for selling finance among the UK’s
smaller dealerships remains as strong as ever.
Asked whether the Retail Motor Industry
Federation had heard any reports of smaller member dealers
decreasing or even cutting their involvement with finance
providers, director Sue Robinson said that it was not an issue she
had come across.
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“We haven’t had any dealers, smaller or
otherwise, report that they are no longer offering finance packages
to their customers. As far as we are aware, dealers are finding it
easier to get finance for customers”
Robinson added, however, that she had seen
increasing evidence of dealers coming back to old habits of
“shopping around” for best rates and commission levels among
finance houses, with independents picking up business as a
result.
“Many dealers are still using captive finance
houses, either through lethargy or manufacturer pressure to use
them. However dealers are more receptive to shopping around than
before, so some – particularly those dealing in used cars – will be
using independent finance houses if the rates are better.”
Paul Harrison, head of motor finance at the
FLA, agreed that there was no lack of proposals from smaller
dealers perceived by his association’s members.
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By GlobalData“I’d be very surprised if this was happening
beyond the level of small family-owned sites” he commented,
New car volumes are still depressed, and
improvements in used volumes aren’t fantastic. If smaller dealers
aren’t making more car sales, it doesn’t make sense for them to
turn their back on F&I – there aren’t many other profit centres
left.”
He added that the tough car sales climate
would only continue to drive dealers towards selling finance, since
it remains a powerful tool for conversion of sales on the
forecourt.
