The motor industry has had a problematic relationship with the consumer media when it comes to used car dealer finance. Perceptions from the press have long seen the media leaning towards personal loans as a less expensive and safer choice. However, MotoNovo Finance CEO Mark Standish is clear that in a rapidly changing and increasingly online retailing environment changing vies of used car finance can be rewarding for dealers, their reputation, car sales and finance, noting;
“In the ‘new normal’ used car dealer finance can break through into the finance mainstream, but we need to wins hearts and minds, addressing some of the deep-seated perceptions of the industry.”
Mark points to two of the leading consumer guidance websites for inspiration;
The Money Advice Service – Credit scores and car finance – ‘If you’re not paying with cash, you’ll be using car finance or credit to buy your car. If you’re using credit, you’ll get the best deals if you have a good credit score’.
Which? Car Finance Explained, published 2nd February ‘negotiate over APR – a reduction in this could save you £100s over the course of a year, and even £1000s over the course of the finance plan.’
These two brief excerpts sum up the challenge which sees both articles leaning towards personal loans and in the case of Which? noting that when it comes to added-value insurance products; ‘Invariably, these products are more cheaply bought independently.’
The two highly influential publications point to a challenge and of course, an opportunity for motor dealers when it comes to finance. In the aftermath of new regulation for motor finance, Mark has empathy with under pressure dealers hoping to hang onto the model and income as it was. However, in today’s easily accessed transparent world, he believes anything close to the old model is unsustainable, as he concludes;
“Over the last year, we have seen the pace of change. I earnestly believe we can turn this to our advantage by improving perceptions and sales with risk-based pricing. Fixed-rate finance is an option, but at the interest rates I see on dealer websites, I doubt the model can survive for long and doing so risks sustaining the negative perceptions of our industry.”
MotoNovo is continuing to lobby the media on matters such as misunderstandings of finance products. Still, when it comes to finance pricing, the industry’s actions will be critical to its future.