Leeds trader 0 Posted December 4, 2017 Hi everybody. I have a stock of around 40-50 cars and Keep toying with the idea of setting finance up as it seems credit is the way forward. I specialise in cars under 5k but if I’m honest most are £2500-£3500 at an age of around 7-10 years of age all above 80k miles. Never looked in to it too much but obviously there are restrictions on lending on cars with high miles and of certain ages. I am wanting to expand my business and take the next step but I know that if I do I may have to buy different cars in order to have a finance company lend against them. Is finance the holy grail or am I better selling my cars for cash as I always have done? Do the car sales slow down over the £5000 mark? Thanks In advance Share this post Link to post Share on other sites
trade vet 704 Posted December 4, 2017 You need a credit licence first.You will then need about 20 £5000 to £9000 stuff.You will need to have a presentable pitch and unless things have changed,be able to provide 2 years annual accounts.I am referring to the top line prime finance providers not these fringe subprime outfits that tend to come and go.I would say steer clear of offering sub prime finance,it is too much aggrevation.Finance commission is a big help towards your VAT bill,it is just a shame for new starters that commission rates are now way below how it used to be. Share this post Link to post Share on other sites
RH Trading 80 Posted December 4, 2017 agree with trade vet, you're price range might attract more sub prime buyers. you need to get your FCA license sorted first though Share this post Link to post Share on other sites
SC Derby 259 Posted December 4, 2017 You don’t need 2 years accounts. I was FCA approved and offering finance after 3 months of opening. Share this post Link to post Share on other sites
Mojo121 229 Posted December 4, 2017 We were able to get approved with Close straight away... no limits on lending, didn't care if it was a £3k car or £10k etc as long as it was within mileage and age criteria. Commissions seemed as if they were a bit low when it was first pitched so we negotiated these things up. Worst way to position yourself is "Hi, my name's John of ABC Cars, I'd like to get some finance setup" The rep comes out and has you over a barrel. It's your business and remember you're in a position of power and you have multiple options As for do things slow down above £5k if it's the right car no not really but you will have some that stick so you have to ask yourself if you're financially ready to have 3-4 cars sat on your pitch that take 4-6 months to go.... not to mention have alot more money tied up in them. Also, the more expensive the car the more expensive the repairs... the grass isn't always greener buddy! Finance doesn't cost anything (bar the license to set it up) and it won't hurt you to filter a few more expensive car in. Test the water but I suppose my point is take it slow... Good luck! 1 Share this post Link to post Share on other sites
grant8064 219 Posted December 4, 2017 £3000 - £5000 stock is fine to finance but it depends on what it is IMO. A £3000 old Merc up on miles is a lot scarier to have hanging over you on finance than a much newer £3000 low mileage Aveo. We do fine with sub 5k finance and a lot of it is not sub prime but you have to tailor your stock accordingly. As Mojo suggests take it slow and try your hardest to find a finance broker that has a good rep who will help you along the way. Share this post Link to post Share on other sites
SC Derby 259 Posted December 4, 2017 We’ve had a couple of customers moan to Close over silly things (one was an interior handle came loose after 5 months of ownership of a 7 seat mpv). every time they have been fair and I’ve not felt they’ve been out to throw us under the bus. Share this post Link to post Share on other sites
Rory RSC 596 Posted December 4, 2017 13 minutes ago, SC Derby said: We’ve had a couple of customers moan to Close over silly things (one was an interior handle came loose after 5 months of ownership of a 7 seat mpv). every time they have been fair and I’ve not felt they’ve been out to throw us under the bus. My findings when I used to use them mirror that. My main current finance company on the other hand.... Can even see the frustration for the rep's dealing I would get the finance in place. Might sell another car or 2 a month out of it minimum and its a given most customers expect a dealer to offer so give them what they want. Make it easy for the customers. Share this post Link to post Share on other sites
justlooking 48 Posted December 4, 2017 1 hour ago, Mojo121 said: We were able to get approved with Close straight away... no limits on lending, didn't care if it was a £3k car or £10k etc as long as it was within mileage and age criteria. Commissions seemed as if they were a bit low when it was first pitched so we negotiated these things up. Worst way to position yourself is "Hi, my name's John of ABC Cars, I'd like to get some finance setup" The rep comes out and has you over a barrel. It's your business and remember you're in a position of power and you have multiple options As for do things slow down above £5k if it's the right car no not really but you will have some that stick so you have to ask yourself if you're financially ready to have 3-4 cars sat on your pitch that take 4-6 months to go.... not to mention have alot more money tied up in them. Also, the more expensive the car the more expensive the repairs... the grass isn't always greener buddy! Finance doesn't cost anything (bar the license to set it up) and it won't hurt you to filter a few more expensive car in. Test the water but I suppose my point is take it slow... Good luck! I'm looking at offering finance, what's the best way to obtain the license, do you it yourself or ask someone like Close to help you with it? Share this post Link to post Share on other sites
Rory RSC 596 Posted December 4, 2017 5 minutes ago, apsleycars said: I'm looking at offering finance, what's the best way to obtain the license, do you it yourself or ask someone like Close to help you with it? Get the finance company to do it for you. Its just easier. Its not rocket science without that but it helps when you are busy with 9 million other things. 2 Share this post Link to post Share on other sites
justlooking 48 Posted December 4, 2017 1 minute ago, Rory RSC said: Get the finance company to do it for you. Its just easier. Its not rocket science without that but it helps when you are busy with 9 million other things. Cheers, I remember starting an application on the FCA site a few months back and got majorly confused. Share this post Link to post Share on other sites
It's me 615 Posted December 5, 2017 hi leeds trader read PDI without mechanical knowledge and decide if you need the money/hassle Share this post Link to post Share on other sites
Earunder 69 Posted December 5, 2017 (edited) If you don't know the ins and outs of finance or any of the FCA rules and regulations you shouldn't be doing finance. Simple. If you're only interested in commission, you shouldn't be doing finance. Simple. Read up on the Rules and Regulations on the FCA website. You need to know this if you're going to be doing finance! ==================================================================================================== Leeds Trader. Yes you can do finance on those cars. If they are your ideal cars, by that I mean cars you are known to have they are great to start with. On those cars though, everyone is right and you will be getting a majority of sub prime. Look at brokers for sub prime: Evolution Finance Mann Island Finance First Response Finance Close Motor Brothers As my post above though, read up on the Rules and Regulations. Can it take you to the next level you're looking for? Depends on your competitors, location and advertising. At the stock level you have, you should be offering finance to be honest. It's not for every dealer, but look into it. Edited December 5, 2017 by Earunder 1 Share this post Link to post Share on other sites
justlooking 48 Posted December 5, 2017 (edited) On 12/4/2017 at 10:38 AM, Mojo121 said: We were able to get approved with Close straight away... no limits on lending, didn't care if it was a £3k car or £10k etc as long as it was within mileage and age criteria. Commissions seemed as if they were a bit low when it was first pitched so we negotiated these things up. Worst way to position yourself is "Hi, my name's John of ABC Cars, I'd like to get some finance setup" The rep comes out and has you over a barrel. It's your business and remember you're in a position of power and you have multiple options As for do things slow down above £5k if it's the right car no not really but you will have some that stick so you have to ask yourself if you're financially ready to have 3-4 cars sat on your pitch that take 4-6 months to go.... not to mention have alot more money tied up in them. Also, the more expensive the car the more expensive the repairs... the grass isn't always greener buddy! Finance doesn't cost anything (bar the license to set it up) and it won't hurt you to filter a few more expensive car in. Test the water but I suppose my point is take it slow... Good luck! Hi Mojo, I have a representative popping in tomorrow to talk about getting setup with them, what commissions are commonplace? because as you say, I dont fancy being slung over a barrel! Especially if there's a lot of red tape to go through to then ultimately be on the same sort of commission levels I'm getting from my current finance company who make my life easy when it comes to finance (I'm simply an Approved Representative with them) PM me if preferred Edited December 5, 2017 by apsleycars Share this post Link to post Share on other sites
