The Ultimate Guide to Offer Finance for Car Dealers

Why Finance Matters for Car Dealership Success

Car dealerships across the UK face increasing pressure to convert browsers into buyers. Offering finance options can be the differentiator. Finance solutions open the market to a wider audience, streamline purchase decisions, and help customers drive away with confidence.

Contents

1. Why Car Finance Drives Sales
2. Key Finance Products for Dealerships
3. How to Implement Finance in Your Sales Process
4. Pro Tips for Maximising Finance Uptake
5. Avoiding Common Mistakes
6. Insights from Industry Experts
7. Case Study: Kandoo’s Impact
8. Frequently Asked Questions
9. Delivering More Value to Customers

Why Car Finance Drives Sales

Providing finance at the point of sale accelerates buying decisions by making vehicles more affordable. Data shows more than 80% of UK car purchases involve some form of finance, allowing dealerships to:

• Appeal to a broader customer base
• Increase average transaction value
• Offer attractive alternatives to cash buyers
• Simplify the buying process

Key Finance Products for Dealerships

Dealerships can offer several tailored finance products to meet diverse customer needs:

Product TypeTypical TermCustomer BenefitsHire Purchase (HP)1-5 yearsFixed payments, own car at the endPersonal Contract Purchase (PCP)2-4 yearsLower payments, option to buy or returnPersonal Loan1-7 yearsFlexibility, no car securityLeasing2-4 yearsDrive new car every few yearsEach has its own suitability depending on the buyer’s circumstances and dealership strategy.

How to Implement Finance in Your Sales Process

Seamless integration of finance into your sales journey is crucial. Follow these steps:

1. Introduce Finance Early: Present options during the initial enquiry stage.
2. Use Technology: Digital finance calculators engage buyers and offer instant clarity on payments.
3. Empower Sales Staff: Train your team to explain finance benefits confidently.
4. Partner with a Specialist Broker: Leverage the expertise and product range of UK-based brokers like Kandoo for greater customer flexibility.

Pro Tips for Maximising Finance Uptake

• Regularly update your offering to reflect market changes and rates.
• Display finance examples clearly alongside car price tags.
• Encourage online finance applications to pre-qualify leads.
• Always present finance as a value-add—not a hard sell.

Avoiding Common Mistakes

• Don't overwhelm customers with jargon. Keep explanations simple.
• Never pressure buyers into unsuitable agreements.
• Lacking FCA authorisation can damage reputation and limit options.

Insights from Industry Experts

"Integrating finance into the sales process is now essential. Dealers who treat finance as a core part of the offering consistently outperform those who do not."

— Retail Motor Industry Federation

"Clear, transparent finance options enhance trust and satisfaction among car buyers."

— Financial Conduct Authority (FCA)

Case Study: Kandoo’s Impact on Dealer Sales

A Midlands-based independent dealership partnered with Kandoo in 2023. Prior to our partnership, finance sales accounted for only 38% of their deals. With tailored digital finance integration and focused staff training, finance penetration rose to 63% within 12 months, with average profit per transaction up 18%.

Frequently Asked Questions

Do customers need good credit for car finance?
Most lenders have options for a wide range of credit profiles, but better terms are available for those with good credit scores.

Are dealers required to be FCA authorised?
Yes, to offer finance legally and transparently in the UK, FCA authorisation is a must.

Does offering finance slow down the sales process?
On the contrary, digital finance applications can speed up approvals and decision-making, resulting in quicker sales.

Delivering More Value to Customers

Embracing finance options not only boosts sales but also provides buyers with greater flexibility and confidence. Clear communication, compliance, and choosing the right finance partner underpin long-term success.

Ready to enhance your dealership’s offering? Consider partnering with a trusted broker like Kandoo. Reach out for a tailored consultation today.