How to Offer Finance for Used Cars

Introduction

Offering finance options has become essential for UK used car dealers seeking to attract more customers and increase sales. With a significant portion of buyers preferring to spread the cost of their vehicle, understanding how to provide finance confidently—and compliantly—is a key differentiator.

Why Offer Finance for Used Cars?

• Wider Customer Appeal: Many customers cannot or do not want to pay upfront. Finance makes cars more accessible.
• Higher Average Sale Value: Customers who finance often buy higher-value cars or add-on extras.
• Competitive Advantage: Stand out from local competitors who may not offer tailored finance solutions.

"For every customer who walks away due to price, finance can keep the deal alive."
— Experienced Used Car Dealer

Common Finance Options for Used Cars

How to Get Started Offering Customer Finance

1. Assess Your Business Needs

• Size of your dealership
• Typical customer demographics

1. Register and Get FCA Authorisation

• The Financial Conduct Authority (FCA) regulates all consumer credit activities.
• Apply via the FCA’s website (FCA Authorisation Guide )
• Required for legally offering finance or credit broking

1. Find and Partner with a Finance Provider or Broker

• Work directly with lenders, or using a broker like Kandoo increases the panel of lenders
• Compare rates, commission structures, and customer service

1. Integrate Finance Options into Your Sales Process

• Train staff to introduce finance at the right time
• Display finance examples clearly on car listings

1. Stay Compliant and Transparent

• Provide accurate finance quotes
• Clearly explain fees, interest rates, and obligations to customers

Key FCA Compliance Rules

"Misleading customers, even unintentionally, can have severe consequences—both legally and reputationally."
— Kandoo Compliance Team

• Only advise on finance if you’re authorised
• Provide customers with a ‘pre-contract credit information’ document
• Disclose commissions when relevant
• Ensure ‘fair treatment’ at all times

Integrating Finance Seamlessly

Practical Tips:

• Use ready-made finance calculators on your website to let customers explore payments on any car.
• Promote finance in advertising—mention low monthly rates next to car prices.
• Host finance clinics or events showing how easy the process can be for hesitant buyers.

Frequently Asked Questions

How quickly can finance be arranged for a customer?

• Often, finance approval can be completed on the same day, sometimes within the hour if customers provide necessary information promptly.

What credit issues do finance companies consider?

• Lenders check affordability, credit history, and sometimes the type and age of vehicle.

Can you offer finance to business buyers?

• Yes—options like business contract hire are available for commercial customers.

Advantages of Partnering with a Retail Finance Broker

• Multiple Lender Options: Increases the chance of acceptance for your customers
• Administrative Support: Help with compliance paperwork and customer service
• Guidance on FCA Regulation: Brokers keep you informed of changes so you stay legal

"A broker like Kandoo can simplify your finance offering and help you close more deals, hassle-free!"

Next Steps to Get Started

• Review your current customer journey. Where could finance make it smoother?
• Speak to a retail finance broker like Kandoo for a tailored solution.
• Begin your FCA authorisation application if not already done.
• Integrate finance promotion across your digital and physical customer touchpoints.

Ready to accelerate your used car sales?

Contact Kandoo today to explore how easy it is to offer the right finance options to your customers.

Key Takeaways

• Offering finance boosts sales by widening accessibility.
• FCA authorisation is a legal must.
• Transparency and compliance protect you and your customer.
• Use brokers to unlock a wider choice and expert advice.