Independent retailers must offer PCP funding on used cars in order to grow sales over 2018, according to Jonathan Holland, managing director at ADESA Remarketing.
“PCPs have become the norm in the new car market as buyers move away from the concept of needing to own their vehicles,” he said. “They have proven to be particularly popular with millennials coming into the car market and looking at monthly budgeting, with a fixed price, rather than outright ownership. Dealers are now finding that used PCPs are resonating with these buyers.”
Holland believes that independent retailers can further support offering PCPs on used cars by taking advantage of new routes to sourcing dealer stock. “We are seeing a growing number of independents taking advantage of sourcing stock online, when it first becomes available, rather than waiting for physical auction sales.
“Stock sourcing is an incredibly competitive business and the most successful independents are buying online and upstream and retailing the vehicles immediately with used car PCPs.”
However, Holland highlighted the potential threat of contract hire and leasing companies setting up B2C sales channels and offering de-fleeted cars with finance.
“The independent sector needs to prepare for the possible challenge posed by contract hire and leasing companies, who have easy access to vehicles, by making sure they have the best possible stocking lines in place and are able to offer customers competitive PCPs,” he said.
In 2017, 1.36m used cars were purchased using point-of-sale dealer finance, according to the Finance and Leasing Association. This figure is expected to increase this year, supported by stock returning to the market following record-breaking new car registrations figures in 2015 and 2016.