Shaun Harris suggests how to keep ahead in retail auto finance despite it becoming a crowded market

If dealers are not showing the monthly PCP price of their stock digitally then they are missing an opportunity – the finance office needs to be online.

Some 83.6% of private new car sales were financed by point of sales finance in April. This impressive number provides clear evidence of the number of people who need to borrow to buy their next car. There is little reason to suspect that the percentage of used car buyers should be significantly different.

In reality, even a 40% used finance penetration would be above the overall market average. There is a huge gap to be filled.

The starting point has to be in creating value in dealer finance at the initial point of purchase. This, like the car, happens online for most customers as recent Google research reveals:

● 74% of car buyers research finance before or while deciding on a model (not after – as would be expected from the traditional linear model of buying a car which ends with considering and selecting finance);

● 43% of car buyers research their car finance on monthly payment terms;

● 71% want to begin the finance process online – saving them time when they are in the dealership; and

● 73% of car buyers are more likely to buy F&I in a dealership when they previously accessed information online.

Finance is not solely about price; rather it is about making the buying journey less cumbersome and more accessible.

Ceding control to the car and finance buyer is a smart dealer move that can help differentiate a business, driving car and finance sales. It means a clear consumer need.

An online finance calculator can create the platform for converting interest into sales, by, for example, enabling customers to create and compare their own HP and PCP quotes side by side, wherever and whenever they choose.

It promotes affordability in a way that is simply not possible for an unsecured loan. Without this online view, the risk to a dealer is that the customer may never contact the showroom to discover the depth of the finance portfolio that is available.

Finance has once again become a crowded market. Unsecured lenders are very active, especially through attractive headline rates. In light of the current macro-economic climate, affordability can only increase in focus for consumers. It’s time for dealers to bring that monthly affordability to life online.

Shaun Harris is Sales Director at Codeweavers