How to Offer Car Finance to Customers

Understanding Customer Finance for New Cars

Customer finance enables buyers to spread the cost of a new vehicle, making purchasing more accessible. As a retail finance broker or dealership, offering finance can boost your sales, improve customer satisfaction, and give your business a competitive advantage.

Why Offer Finance to Car Buyers?

• Increases affordability for customers
• Helps close more deals and larger sales
• Competitive edge over dealers without finance options
• Creates ongoing customer relationships and loyalty

"Almost 90% of new cars in the UK are bought using some form of finance" – Finance & Leasing Association

Types of Car Finance Products

Common finance options you can offer:

1. Personal Contract Purchase (PCP): Low monthly payments, with a balloon payment at end for ownership or return of the car.
2. Hire Purchase (HP): Fixed monthly payments leading to complete ownership after final payment.
3. Personal Loans: Lender pays the dealer upfront, customer owns the car immediately, then repays lender in instalments.
4. Leasing (Personal Contract Hire): Monthly payments to use a car for a set period, with no option for ownership.

Setting Up Car Finance for Your Dealership

Steps to Get Started:

1. Select a Finance Provider: Partner with a reputable retail finance broker, such as Kandoo, or directly with banks/lenders.
2. Obtain FCA Authorisation: In the UK, offering finance requires approval from the Financial Conduct Authority.
3. Staff Training: Ensure your team understands finance products, compliance, and customer service.
4. Integrate Finance Offers: Display finance options in your showroom and on your website.
5. Stay Compliant: Adhere to regulations regarding advertising, affordability checks, and treating customers fairly.

"If you’re new to offering finance, working with a broker can simplify setup, reduce risk, and streamline compliance."

Key Legal and Compliance Considerations

• Must be FCA authorised or be an appointed representative of an authorised firm
• Provide clear, fair, and not misleading finance information
• Perform affordability checks for all finance proposers
• Supply pre-contract information and ensure cooling-off periods are respected

Compliance Tip:

Always document quotes, customer communications, and signed agreements to protect your business.

Boosting Sales with Customer Finance

Practical Strategies:

• Advertise typical monthly costs, not just vehicle price
• Pre-approve customers or offer quick online finance calculators
• Highlight flexible terms and quick decisions
• Train sales staff to explain benefits, not just features

Benefits for Your Dealership

• Greater customer trust and loyalty
• Increased conversion rates on leads
• Opportunity for value-added extras (insurance, services)

Frequently Asked Questions

How much does it cost to set up car finance?
Most brokers like Kandoo don’t charge upfront fees; costs are usually commission-based.

Do I retain control over finance deals?
With most broker partnerships, you handle customer relations while the broker manages underwriting and compliance.

How quickly can customers be approved?
Many applications can be decided within minutes, improving the buying experience.

Get Started with Kandoo

Ready to offer finance for new cars? Kandoo can connect your dealership with a panel of lenders, help you stay compliant, and provide an easy setup process.

Contact Kandoo today to discover how offering finance can accelerate your business growth.

“Empowering customers with flexible finance options is a win-win – they drive away in their new car, and you grow your business.”