Tesco has confirmed that it is considering
partnering with an independent car finance company to sell finance
alongside its new online used car venture, as well as weighing up
the potential to launch its own HP and PCP products.

A spokesperson for the supermarket said that
the team behind its new Tesco Cars venture was having “continual
meetings”, both internally and with other companies, in order to
decide on “alternative offers” to its current offering of personal
loans from Tesco Bank.

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However, they added that there was “no
timescale yet for when a decision will be in place”.

At present, the “Finance” tab on the Tesco
Cars website leads to a page promoting personal loans quoted at
“7.4% APR Representative on loans from £7,500 to
£14,999”.  

If Tesco was to link up with a third party
finance provider to provide purchase finance for Tesco Cars, it is
uncertain how much revenue the funder could see from the deal –
Tesco Cars will only reveal its aspirations in terms of sales
volumes for 2011 when Tesco publishes its annual report at the end
of April.

However, Tesco is likely to be seeking a high
level of finance penetration within its online car sales: the fact
that fleet companies are choosing to sell cars through Tesco rather
than through auction houses suggests limits to the margins the
supermarket will be making on each vehicle sale.

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Many have speculated that it will seek to top
up profits through revenue from finance and servicing – a point of
view supported by this month’s launch of Tescoautocentres.com, a
service, repair and MOT network under the Tesco brand.