Dealers could see their share of the car finance market increase in 2015 on the back of strong PCP sales.
That’s the view of finance provider Alphera, which said that while overall car sales may slow this year, strong PCP offers will continue to drive finance business for networks.
“Low interest rates in recent years have made it increasingly affordable for consumers to take out credit. While interest rates are likely to go up in 2015, the decreasing price of oil and current low inflation level means that this probably won’t happen until the latter part of the year. As such, we believe that PCP will continue to provide a cost-effective and flexible way for consumers to purchase the car they desire.
“The data is incredibly positive and, while indications are that growth will slow in 2015 as the market reaches its inevitable peak, consumers will continue to take advantage of the great deals available for both new and used vehicles.,” said Samantha Cripps, Alphera head of sales development
Cripps is among those who argue that the new customer-centric FCA finance regime will also help dealers focus on customers and their needs.
“In addition, as retailers and finance companies demonstrate a renewed focus towards great customer outcomes, the opportunity for consumers to benefit from the low cost of money is likely to continue in the first half of the year.”
Currently dealer finance accounts for 75% of the market and Alphera believes this could increase in 2015.
“We believe that PCPs will continue to provide a cost-effective and flexible way for consumers to purchase the car they desire.
“Indeed, while the growth in overall car sales may slow down, it is perfectly possible to increase the share of dealer-sourced car finance from the current 75% to more than 80%,” said Cripps.
Cripps said Alphera was working with its dealers to increase penetration and improve customer retention this year.
