Car manufacturers and the iPhone generation

343 More

Earning the right to be successful

314 More

Knowledge is power

339 More

Selling cars – it’s all about timing

577 More

Truemag

  • Home
  • About
  • Advertise
  • Archives
  • Contact
  • Subscribe

Car dealer finance has come a long way

Should you wish to borrow money to buy a car, and of course you’re lucky enough to qualify for finance, there are certainly some pretty good deals about. We are slightly biased of course because we have usually found that as well as having more flexible options to offer for customers looking to fund the car purchase car dealers certainly have much more competitive interest rates.

In a straight competition between high street straight forward personal loans and dealer finance, it would probably be a close call, certainly for buyers with blue chip credit ratings. However weighing up the options with regards to the different ways of funding cars dealer finance wins hands down.

PCP’s (personal contract plans) with different deposit options and low APR’s are designed to protect the customer from the negative equity trap but also tailored to fit the car buyer’s monthly budget.

As I have said I’m probably biased but when I look back to the days when this kind of finance came across the water from America it was a product viewed with suspicion by customers and often miss-sold by car sales people. Some sales execs viewed the exceptionally low monthly payments as an excuse to conveniently forget to tell the customer that there was a balloon payment which needed to be settled at the end!

A lot more thought goes into the packaging of PCP’s today, to such an extent that they have overtaken more traditional borrowing solutions hands down. What’s more, from a dealer point of view, they are a lot easier to track. The dealer can make timely contact at the point when a customer is likely to be in parity or equity, and therefore at the optimum time for changing their car.

More thought goes into setting the future value of cars and, as far more data is now available. It is not very often that a customer feels the need to just give the car back at the end of the contract and walk away and the dealer would certainly view this as a missed opportunity when it does happen.

So with exceptionally low rates on offer (do your research because of course this will vary from dealer to dealer) and packages from as little as one payment up front as a deposit, many buyers are getting cash back on their existing car and using that cash to fund or partly fund the loan on the new car. At the same time they get the protection of a risk free investment and a long manufacturer’s warranty. That’s not to mention the increasingly popular service plans which are being attached to finance plans and which really enable customers to budget successfully for the period of the loan.

Mar 10, 2011In51der

Subscribe to Motor Trade Insider by Email

 

  • Dealer finance on new cars up 6% in January
  • Car buyers should not overlook dealer finance
  • Car dealer finance still being overlooked
  • Decline in dealer finance eases up in July
  • Dealer finance still most popular but figures drop
  • Despite the headlines dealer finance is actually on the rise
  • Latest generation Ford Fiesta tops 1 million sales in EuropeRecord profits for dealer group Lookers PLC
    You Might Also Like
     
    Selling direct may not be the answer for car makers
     
    More budget cars set for UK as Dacia announce UK version of “Duster”
    In51der

    Motor Trade Insider - Bridging the gap between the customer and the Motor Trade

    8 years ago Blog, Car Finance, Consumer138
    Most viewed
    Top 100 UK Dealer Groups
    18,691 views
    The car sales process and the “9 point plan”
    6,673 views
    webuyanycar review – They will buy any car but beware of the asterisk
    2,462 views
    Most commented
    Car sales and the power of silence…
    25 Comments
    Car dealers still not prepared to play the “we buy any car” game
    23 Comments
    A Traders Tale – Part Four
    22 Comments
    Win a pre-loaded Ipod Shuffle!
    19 Comments
    Bargain of the Week – StreetKa 1.6i Luxury
    14 Comments
    Bridal Hair Berkshire
    Fox Body to 2018 Mustang Parts
    and Accessories
    About MTI

    Motor Trade Insider
    is written by people working actively in the motor trade for people on the inside and people on the outside.

    Our aims
    Build a bridge between consumers and the trade, create Interesting and informative content, break down barriers and create better understanding, expose bad practices and rip-offs and promote outstanding products and service.
    Have something to say?
    We are always looking for experienced writers who can write good original quality posts on motor-trade-insider.com. Please contact us if you would like us to consider you. Make sure you give us details of your own blog or a link to some articles you have written.
    2017 © Motor Trade Insider
    Truemag theme by StrictThemes