The company points out that the penetration of PCP in the used sector still trails new cars by some distance, so that there remains potential for very worthwhile growth.

Paul Burgess, CEO, said: “There has been rapid expansion of used car PCP in the last few years and probably something like 40% of used car motor finance is now PCP-based.

‘This is a high level but is still some way behind the new car sector – a fact which probably, in itself, is an indication that there is potential for even more used car PCP.

“However, the variety of used PCP products available is quite limited and, to maximise that potential, we need to see a greater level of innovation with more PCP products that are based on the particular needs of used car buyers.”

Paul said that new approaches could be created based on everything from how used car PCP products were sold through to the people at which they are targeted.

He said: “So far, almost all used PCPs have been based on a one-size-fits-all approach but, arguably, the diversity of buyers and needs in the used sector is even wider than new.

“Really, the motor finance sector needs to look at how to meet these needs, especially given the speed with which the macro economic picture could change over the next year or two.”

Startline recently launched its own PCP product that is designed to be offered by dealers alongside products from traditional prime lenders and suggested as an alternative source of funding when applicants are declined. However, like the company’s other flexible prime motor finance products, it offers APRs and terms similar to those offered by prime lenders rather than resembling a sub-prime product.

Paul said: “For some of the dealers with which we work, more than half of the business we now write with them is based on our PCP, so it clearly illustrates the value of innovation.

“We are also looking at other ways of enhancing our PCP offering and expect to be able to make some announcements very soon.”