Raphael Finance urges dealers to access finance solutions for used car buyers

21st September 2016

According to new SMMT¹ data, the used car market is experiencing considerable growth, with over 4 million used cars changing hands in the first half of 2016 – a 7.9% increase year on year. The Finance and Leasing Association²

is also reporting a 7% year on year growth in the volume of point of sale finance for used cars. But specialist motor finance business, Raphael Finance believes this new data – which illustrates that just 16% of used cars sold in the first half of 2016 were financed at point of sale – means that that many used car retailers could be missing out on sales opportunities.


“With just over 650,000 used cars financed at point of sale in the first half of 2016, according to the FLA, but over 4 million used cars changing hands from January to June, there is clearly a big opportunity for more used cars to be financed as part of the vehicle sale”, explained Darren Greenyer, Deputy Head of Lending at Raphaels Bank. “With 1st September bringing the new plate, retailers are likely to have increased used car stock. It’s therefore vital that they ensure they are ‘open’ to all customers.


“There has been so much focus in the last couple of years on consumer affordability, that the finance solutions used by some dealers may mean they are having to turn away good customers simply because they don’t meet the criteria of automated scoring tools. Finance should be seen as an enabler of a car purchase rather than a blockage. Efficient processes, good use of data and technology is a must for lenders, providing dealers and their customers with a compliant, swift, efficient experience.”


Raphaels’ ‘blended’ approach offers motor retailers more flexibility than if they rely on finance offerings that are based solely on automated processes.


“Many hundreds of families view car ownership as an essential part of their daily lives”, continued Darren Greenyer. “But automated credit scoring could rate them poorly because of financial difficulties experienced in the past. The reality is, however, that with secure and regular income many of these customers may not be as risky as automated scoring tools would suggest. Motor retailers therefore need to ensure they are working with finance partners that offer the flexibility to assess these customers fairly.”



¹ https://www.smmt.co.uk/2016/08/record-number-of-used-cars-bought-in-first-half-of-year-as-4-million-cars-change-owners/

² https://www.fla.org.uk/index.php/consumer-car-finance-volumes-up-11-in-first-half-of-2016/

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