Is offering finance beneficial at £2000 to £4000

[BIGNIT 4]

Mainly stock cars between £2000 and £4000 price point

I never offered finance as I rightly or wrongly always thought it will be a hassle (with declines, extra paperwork etc), I dont want customers rejecting car to finance company 5 months down line(should this be a genuine concern?) and I didnt like the idea of doing business with people who need finance on what is a cheap old car ( I dont want people with no money barley keeping up with repayments ringing me moaning it needs eg a tyre a few months down line )

Obvious plus point is I might sell more cars and I might get some commission (cant imagine much on a 3k car though).

Is it worth offering finance on such a low price point and if so who would you recommend  using?

 

[EPV 631]

I’d say you’d get more finance props at that price point than the £7-£10k range. MOT failures, first time buyers, additional family cars etc. Blue Motor Finance are good, they have tiers, from prime down to hopeless. Get a broker for the declines. 

[BHM 994]

3 hours ago, BIGNIT said:

Mainly stock cars between £2000 and £4000 price point

I never offered finance as I rightly or wrongly always thought it will be a hassle (with declines, extra paperwork etc), I dont want customers rejecting car to finance company 5 months down line(should this be a genuine concern?) and I didnt like the idea of doing business with people who need finance on what is a cheap old car ( I dont want people with no money barley keeping up with repayments ringing me moaning it needs eg a tyre a few months down line)

I don’t ‘do’ finance for these exact reasons. I’m 100% sure you’ll get additional interest as barely a week passes without a finance enquiry but the thought of a customer backing a car to the finance company (then back to me) or them whinging two months later about a drop link or similar fills me with dread. About 50% of cheaper-end punters make no bones about running their cars into the ground with zero or the absolute minimum of maintenance - I don’t want some ignorant scruffy bastard bouncing them back with bald tyres, shagged brakes, trashed interior & no oil in the engine. Perhaps I’m old fashioned but a deals a deal & when the cars go I don’t expect to see them back until p/x time. 

I’m told by a peer that there are plenty of companies that finance up to 150K miles/12 yrs old at the end of the loan term! Rather you than me.

[Mark101 536]

I don't believe finance has actually got me any more sales (as people can get bank loans, credit cards etc) but I do enjoy the comms when I do sell on finance.

Don't think it will revolutionise your unit sales, it won't. Yes people ask all the time but often they can;t get it or will source elsewhere.

Comms on £3,000 car, probably around £250-300 depending on what deal you can get.

[EPV 631]

I think the fear of someone returning a car to a finance company for no valid reason is misplaced. Yes, people reject cars and yes they involve the finance company. But lenders are only too aware of the CRA and don't just bend over when someone complains that a tyre has blown of a set of pads need replacing. If you're happy to sell a car and stand by it under the law (as I'm sure we all are) then selling it on finance doesn't make any difference.

[grant8064 219]

25 minutes ago, EPV said:

I think the fear of someone returning a car to a finance company for no valid reason is misplaced. Yes, people reject cars and yes they involve the finance company. But lenders are only too aware of the CRA and don't just bend over when someone complains that a tyre has blown of a set of pads need replacing. If you're happy to sell a car and stand by it under the law (as I'm sure we all are) then selling it on finance doesn't make any difference.

+1

On the few occasions we take a car back it's only for good reason; cash or finance buyer it would make no difference to the decision. I've never experienced a finance company putting any pressure on me facing a complaint or rejection so long as it's dealt with properly.

BIGNIT; FWIW we do 2K - 8K and find about 90% of the finance applications that get accepted are on 5K + stock. Under 4K we find little uptake or enquiry.

(that said we do get plenty of enquiries for finance on £995 part ex's  ) 

[David Horgan 564]

I've sold 8 cars this month upto now on Prime Finance MOTO NOVO & Close Brothers  ranging from Three at  £3,295 , £7995, £8295 ,Two at £ 10749 , £14995 

These are cars I wouldn't of sold as soon otherwise in my opinion if I waited for a debit card customer . . 

Never had one bounce back either . But I don't entertain Subprime deals , my advice to them is sort your life out , get your credit history repaired and start again . 

If they cant get prime rates they cant afford to run the car , but that's my thinking . 

 

[Rory RSC 596]

21 minutes ago, David Horgan said:

I've sold 8 cars this month upto now on Prime Finance MOTO NOVO & Close Brothers  ranging from Three at  £3,295 , £7995, £8295 ,Two at £ 10749 , £14995 

These are cars I wouldn't of sold as soon otherwise in my opinion if I waited for a debit card customer . . 

Never had one bounce back either . But I don't entertain Subprime deals , my advice to them is sort your life out , get your credit history repaired and start again . 

If they cant get prime rates they cant afford to run the car , but that's my thinking . 

 

Your finance rep must love you. Whats your finance pen at 80+%   

[David Horgan 564]

Both the reps love me , keep me in Biscuits they do 

varies month on like everything really regarding the finance , I don't turn debit cards down but i do push the finance deals , Had three customers one sat morning on same car  Guess who got it  Moto Novo Man , one was a ditherer and the other wanted money off for cash 

[Rory RSC 596]

In answer to original question -

Do you like making more money per sale?

Do you like putting fewer obstacles in front of customers?

Do you like making it easier for people to buy when they want to buy from you?

 

[Nick M.K. 574]

On 11/12/2019 at 9:16 AM, BIGNIT said:

Mainly stock cars between £2000 and £4000 price point

You will be surprised how many £3995 buyers want it on finance. Of course it will be a huge advantage. 

Especially when you pocket a few hundred pounds commission from a car that only brought £300 profit. Then when someone is sitting opposite you asking "What can you do for cash" you will look genuinely taken aback as you genuinely wouldn't want cash, especially an amount lower than your asking price. Apply for your FCA permission ASAP. 

[Adam-bdm 1]

On 11/12/2019 at 9:16 AM, BIGNIT said:

Mainly stock cars between £2000 and £4000 price point

I never offered finance as I rightly or wrongly always thought it will be a hassle (with declines, extra paperwork etc), I dont want customers rejecting car to finance company 5 months down line(should this be a genuine concern?) and I didnt like the idea of doing business with people who need finance on what is a cheap old car ( I dont want people with no money barley keeping up with repayments ringing me moaning it needs eg a tyre a few months down line )

Obvious plus point is I might sell more cars and I might get some commission (cant imagine much on a 3k car though).

Is it worth offering finance on such a low price point and if so who would you recommend  using?

 

Always a good broker out there who will do all the hard work for you, even if your not FCA approved (yes I can do that). Comms vary depending on what your volume is like, can be £100 to 5% of borrowed value, real money to be made from it, and no effort required from you. Will get you point of sale material, set up your website with banners links etc. As for bouncing back, the broker I'm talking about will give you a pre delivery check sheet to reduce the chance of rejection, let me know if you want more info. 

[MarkTVS 209]

I’m with everyone else, we even sold a £1995 Corsa on finance the other day, we sell about 3/4 cheapies per month on the drip. Deffo worth doing 

[SC Derby 259]

I really don't get why anyone wouldn't want to offer it tbh.

Edited November 13, 2019 by SC Derby

[Adam-bdm 1]

Money mostly, and they might be deals you wouldn't have done otherwise.

[Arfur Dealy 823]

 

On 11/12/2019 at 9:16 AM, BIGNIT said:

Mainly stock cars between £2000 and £4000 price point

I never offered finance as I rightly or wrongly always thought it will be a hassle (with declines, extra paperwork etc), I dont want customers rejecting car to finance company 5 months down line(should this be a genuine concern?) and I didnt like the idea of doing business with people who need finance on what is a cheap old car ( I dont want people with no money barley keeping up with repayments ringing me moaning it needs eg a tyre a few months down line )

Obvious plus point is I might sell more cars and I might get some commission (cant imagine much on a 3k car though).

Is it worth offering finance on such a low price point and if so who would you recommend  using?

 

If you are running a site, and open to the public I cannot see the benefit of not offering finance. They will expect it and you will have to deal with those types of billies. The only way to know is to do it

[Rory RSC 596]

1 hour ago, Arfur Dealy said:

 

If you are running a site, and open to the public I cannot see the benefit of not offering finance. They will expect it and you will have to deal with those types of billies. The only way to know is to do it

Who are you and what have you done with Simon? 

[BIGNIT 4]

Thanks for advice everyone, in conclusion I think only way to know its for me is to have a go.

Who would be best company to deal with for me. Ideally one who would help with FCA applications and would accept customers at this price point.

And should have mentioned I run my business on an appointment only basis from an industrial estate not a traditional forecourt. (Dont know if that will make any difference)

[Adam-bdm 1]

BIGNIT, drop me a line if you want me to run through someone with you.

[Nick M.K. 574]

1 hour ago, BIGNIT said:

Who would be best company to deal with for me

Close Brothers

[Adam-bdm 1]

wont deal with you if you dont have FCA.

[RJEauto 18]

10 hours ago, BIGNIT said:

Thanks for advice everyone, in conclusion I think only way to know its for me is to have a go.

Who would be best company to deal with for me. Ideally one who would help with FCA applications and would accept customers at this price point.

And should have mentioned I run my business on an appointment only basis from an industrial estate not a traditional forecourt. (Dont know if that will make any difference)

We use Blue motor finance (prime) and connected car finance (broker) both offer great comms for us and helped with initial FCA application

[Adam-bdm 1]

Just use Autobahnfinance as a broker, no need to go through the pain of FCA, they have everything from Uber Prime to PL...perfect for smaller amounts!

[David Horgan 564]

22 hours ago, Adam-bdm said:

wont deal with you if you dont have FCA.

No point if you don't get FCA approved , not difficult , then you can choose who to deal with and attain some commission too , No Brainer 

[Adam-bdm 1]

Or deal with a broker who doesnt need you to be, deals with Blue, Close, Oodle etc and pay you a commission...Even better!