17 Sep 2018
Increased economic uncertainty is likely to mean that dealers shift their emphasis even further towards used cars next year than during 2018.
Startline Motor Finance says that feedback it is receiving from its customer base shows that they do not expect substantial recovery in the new car sector and are backing used sales.
CEO Paul Burgess said: “We are entering a phase where there is no hiding from the economic headwinds that will slow the economy. If people are tired of hearing about Brexit at the moment, then they should perhaps consider locking themselves in a dark room for the next few months and longer. It will be economically omnipresent.
“Obviously, some of the forecasts and predictions being made are quite extreme but, even at the lower end of its impact, Brexit is likely to lead to contraction in the economy, wage stagnation and possibly increased unemployment.
“All of these will have an impact on a new car market that is unlikely to quickly bounce back from the effects of WLTP that have impacted its performance in recent months.
“Instead, we’re expecting larger numbers of buyers to move into the used car sector, especially at the newer end of the market, with 1-3 year old vehicles serving as value-for-money, lower risk alternative to a new car.”
Paul said that Startline was already seeing an increased investment and attention being given to the used car sector among those who sold its motor finance.
“Certainly, it is no secret that dealers are investing in new vehicle sites and facilities but we are also seeing attention being given to approved used schemes, too.
“The actions being taken range from major investments to on-the-ground rethinks about how to maximise used car sales and meet the changing needs of customers.
“Especially, we are seeing a lot of interest and activity around the used car sales process, add-on products and finance, which is where we are getting involved in looking anew at how our flexible finance options can fit into lending panels and reach new customers.
“Our view is that the car retailers who are making these moves now are the ones who will thrive in 2019. It is a year that, we believe, will unavoidably provide a rocky ride but those who take a proactive approach to the used vehicle sector will continue to thrive.”