Dealers are facing a new threat to profit margins as research reveals the impact on specialist car finance take-up of aggressively low new High Street personal loan rates.
The warning comes from new and used car online distance sales specialist Buyacar.co.uk, which generates consumer sales orders for major franchise dealers.
Buyacar.co.uk has identified a marked slow-down in the take-up of specialist motor finance, despite a month-on-month rise in unit sales from its platform for both new and used cars.
Research among Buyacar.co.uk’s recent cash transaction customers reveals an increase of up to 50% in the number of buyers taking advantage of aggressively positioned High Street loans offering APRs as low as 3.3%.
These figures for specialist finance take-up among Buyacar.co.uk’s consumer customers may signal tougher times ahead for those who rely most heavily on F&I – finance and insurance products – to sustain their unit profitability.
Interviews with consumers paying cash to buy cars from dealers via the Buyacar.co.uk platform also confirms the suspected correlation between recently launched High Street unsecured finance products and a reduction in customers opting for specialist finance.
As an online business, Buyacar.co.uk believes the scale and immediacy of its consumer intelligence makes it highly attuned to seeing trends emerge even before they are revealed in the bricks and mortar market.
