Dealers are seeing growing sales of used cars on PCPs with demand set to increase.
According to figures obtained by Motor Trader from the FLA, in 2014 PCPs accounted for 33% of finance on used cars worth £3.5bn compared to 25% worth £2.3bn in 2013.
John Hughes, a director with Mann Island, sees the market for used PCPs growing further in 2015.
“The sweet spot is in the up to four-year age range. PCP can be particularly important in helping dealers make nearly-new cars more attractive, which is a key factor in the face of manufacturer support on new cars,” he said.
Lee Streets, a director with Evolution Funding, is also an advocate of used PCPs.
“Used car PCP volumes will continue to increase but not dramatically. Prime age banding are from pre registered to two-year old stock. At Evolution we have seen a large increase in dealers asking us to create low rate APR based PCP offerings, from as low as 5.9% APR, to help promote nearly new and pre-registered stock in the same manner as new.”
Kirk Franks, head of national sales at ALPHERA Financial Services, believes with the new FCA Treating Customers Fairly (TCF) rules at the heart of the sales process, the customer offering needs to be more transparent with a choice of products, including used PCPs, being presented.
“The market for [used] PCP continues to grow. Proactive dealers have embraced PCP, not only as a sales opportunity but also for the way in which it increases retention.
“A mindset change is required for dealers to embrace the fact that older one to four year old used vehicles can be sold with a compelling PCP. This product is not limited to pre-registered and nearly-new cars,” he said
