F&I Management & Training

The latest motor finance market statistics published by the Finance & Leasing Association show growth in the used car market in February, as well as in the new car market.

Volumes of used cars sold to consumers on motor finance grew by 3%, and values by 11% in February. In the used car market, only four of the past 18 months have seen any growth when compared with the same month a year earlier.

New cars purchased by consumers with motor finance remained strong with the market growing by 49% in the last three months compared with the same period 12 months ago. The number of new cars sold on finance in February was 29% higher than in February 2009, although car sales were very sluggish in the first two months of last year.

Commenting on February's motor finance figures, Paul Harrison, Head of Motor Finance, said:

"It is a sign of increased consumer confidence that both the new and used motor finance markets are up. We may well be seeing a return to a more settled car-buying pattern as Government incentive schemes come to an end.

"We expect growth to continue into March, particularly as many customers will have delayed buying a new car and waited for the release of the '10 registration plate. Many customers buying new cars, will use their old car as part exchange, which could give a timely boost to the supply of used cars in the market over the next few months."

Italian car maker Fiat has reported further losses despite the recent recovery in the car market.

The company said it made a loss of 25m euros (£21.7m; $33.4m) for the first quarter of the year.

Meanwhile its US subsidiary Chrysler lost a further $197m (£128m) - adding to the massive $3.8bn it lost following bankruptcy last year.

Fiat is due to outline a new five-year business plan later, outlining closer integration with Chrysler.

Despite the losses, Fiat said its sales - which include trucks and farming equipment alongside cars - were up nearly 15% on the same period last year.

Car sales alone saw a 22% increase, thanks in part to the continuing impact of Europe's car scrappage schemes.

But Fiat said it expected to be hit hard by the winding up of such schemes.

The end of the German scrappage scheme has already seen sales drop 73%, it said.

Fiat's chief executive Sergio Marchionne also sought to sound optimistic over the prospects for Chrysler despite the heavy losses.

He pointed out that Chrysler actually made a profit of $143m for the first quarter, if tax and one-off costs were disregarded.

The US-brand was also seeing increased revenues, he said.

Rivals profit

There was better news for rival European car firm Volkswagen, however, which reported profits of 473m euros for the first three months of 2010 - nearly double the profits recorded a year earlier.

Mazda dealers have been asked to sign up to a new scheme that involves an outsourced specialist sales force being used to attract business from sub-50 fleet operators.

The new programme, which begins on May 1, will see participating Mazda dealers work with Magma Services (part of Magma Group) to win business from thousands of small businesses that are already held on dealer databases.

Mazda has employed Magma to provide a sales team that will focus on sub-50 fleet operators, while Mazda’s own team will continue to work with larger fleets.

“It will be a referral process that complements the activity our own team does with larger fleets,” explained Mazda fleet and remarketing director Peter Allibon.

“We will effectively have two sales forces. Our new team will spend at least 50% of their time working with dealers, although they may also go direct to customers.”

Allibon said dealers have a database of thousands of small fleet customers which will be used by the new sales force.

Sites that are already set up to deal with business customers and other dealers, who may have business sales specialists working at another franchise within the group, will also be encouraged to participate.

He said the programme would not be suitable for all sites, particularly smaller dealers that had a strong retail focus.

“We will invite any dealers that are interested in joining the programme,” he said, “And those that want to can come and speak to us about it and we will review the plan with them.”

Allibon said 20 dealers will be involved in the first phase covering 32 ‘areas of influence’ with a further 12 planned for the second phase covering 40 areas.

He added that prospects found through the programme that already have relationships with contract hire companies would be able to continue that relationship, or could take out Mazda’s own contract hire scheme.

DATED: 23.04.10

FEED: AM

A growing number of car buyers are using motor finance deals to buy new and used cars, according to the latest motor finance statistics.

The number of new cars sold on finance in February was 29% higher than in February 2009, although sales were sluggish in the first two months of last year.

New cars purchased using motor finance remained strong with the market growing by 49% in the last three months compared with the same period 12 months ago.

Volumes of used cars sold to car buyers using motor finance deals grew by 3%, and values by 11% in February.

In the used car market, only four of the past 18 months have seen any growth when compared with the same month a year earlier, according to the Finance & Leasing Association

"It is a sign of increased consumer confidence that both the new and used motor finance markets are up,” said Paul Harrison, head of motor finance at the FLA.

“We may well be seeing a return to a more settled car-buying pattern as Government incentive schemes come to an end.

"We expect growth to continue into March, particularly as many customers will have delayed buying a new car and waited for the release of the ‘10' registration plate.

"Many customers buying new cars, will use their old car as part exchange, which could give a timely boost to the supply of used cars in the market over the next few months."

However, a recent HPI survey found that only 11% of car buyers it surveyed would take out finance through a dealer and 56% of those looking for dealer finance stated that the rates weren’t competitive.

The survey also showed that 52% of those respondents that were actively looking for finance believed there were less finance options available to them.

This is particularly worrying given 74% of those car buyers surveyed said they were not worried about using credit for their next car purchase, demonstrating there is a market there.

HPI also found that only 11% of car buyers it surveyed would take out finance through a dealer and 56% of those looking for dealer finance stated that the rates weren’t competitive.

Most of the respondents (77%) confirmed that competitive rates are the most important factor when offered finance from a dealer.

“Unfortunately car finance through dealerships has gained a reputation as being uncompetitive and a general lack of its availability is putting buyers off turning to dealers," said comments Daniel Burgess, automotive director of HPI.

"This is to be expected when you take into consideration that high profile lenders have moved away from this market in recent months."

HPI said its Finance Gateway can help dealers take advantage of this market.

DATED: 23.04.10

FEED: AM