The “credit crunch” could prove anything but for car dealers…
In-house finance products could increase market penetration
Tighter High Street lending prompted by the “credit crunch” could provide dealers with increased opportunities to sell their own in-house finance products, according to RAC Warranty.
The breakdown provider has teamed up with The Warranty Group to provide financial services, and told Motor Trader that tighter economic conditions are already prompting better penetration of warranty products and that a similar effect could be seen when it comes to used car finance.
“Dealers have had a tougher time selling their own finance products in recent years because the High Street lenders have provided extremely cheap loans to used car buyers,” said Ian Simpson, RAC Warranty sales and marketing director.
“However, that is beginning to change. Dealer finance packages are not only looking more attractive from a competitive point of view but the convenience and face to face nature of dealer-based lending could easily gain customers.”
Simpson said he noticed that used car dealers were discovering the benefits of selling a range of financial products in a structured approach, something that had been neglected in recent years.
“Although used car sales themselves have fallen, the penetration of warranties and other types of insurance have started to rise. There is every reason to expect that a concerted approach to selling dealer finance could bring similar results,” he said.