F&I Management & Training

Dealers have been urged to put finance calculators on their websites or face losing business to banks launching car loan schemes.

The warning follows last month’s launch of an online secured loan package by Halifax, part of the Lloyds Banking Group, enabling car buyers to fund purchases through PCP and HP packages. The Halifax Car Plan Extra offer is restricted to the bank’s online customers and is initially only available for used car purchases although a new car finance scheme is planned.

“This is clearly a move to test the market and if successful Lloyds Banking Group could roll it out to their other brands including Bank of Scotland. Dealers should be just as concerned about Halifax’s entry into the car loan market as they are about the FCA changes,” said an industry insider contacted by Motor Trader.

“Dealers can protect themselves. If ever there was an argument needed for dealers to promote finance online with tools such as finance calculators, then this is it.”

MotoNovo Finance managing director Mark Standish also believes the threat from banks and other direct lenders is serious and urges dealers to take steps to safeguard their offerings.

“The industry should be under no illusion that as the economy improves competition from direct, high street and supermarket lenders is increasing. Nor can dealers rely upon the benefit of dealer-focused secured finance products, as the recent move by Lloyds Banking Group to take HP and PCP direct to their customer base reveals.

Standish is confident that MotoNovo’s dealer clients  will be in a good position to compete against the banks.

“Through the recent boom times, as a dealer-dedicated finance business, we have always looked ahead to anticipate changes in our market. Our driver has been to establish the dealer as the natural place for car finance. Creating a unique portfolio of digital tools and expertise has been central to this ethos”

Halifax also defended its decision to launch the scheme which could potentially conflict with dealers selling Black Horse finance, also supplied by Lloyds Banking Group.

“We remain fully committed to supporting the point of sale motor finance industry through Black Horse where we work with UK dealerships and motor manufacturers to offer competitively priced motor finance to UK end consumers for their car, bike or leisure vehicle of choice. However we have also identified that there is a need to broaden the car finance proposition for customers who prefer to interact digitally and direct with their bank and hence why we launched this new product through our Halifax challenger brand,” said a Lloyds Banking Group spokesperson.

DATED: 02.04.15

FEED: HA