A dealer and an account manager looking at a vehicle on a forecourt

Are you an independent used car dealer looking to purchase vehicle stock for your forecourt, but you're not sure if unit stocking finance is right for you? Don't worry, we're here to help demystify what unit stocking finance is and why you should think about this type of finance.

What is unit stocking finance?

Unit stocking finance is a loan specifically designed for car dealers and dealerships to acquire vehicles for their forecourt. The single credit facility can be used to acquire multiple vehicles with dealers repaying their balance via repayments to ease the burden on their cashflow. You might also know unit stocking finance as stock finance or stock funding.

At V12 Vehicle Finance, and as a full-service lender supporting independent and franchised dealers, we offer unit stocking finance plans that enable dealers to grow their business and purchase cars from wholesale, auction and other trade sources quickly and easily. You can use unit stocking finance to purchase both cars and light commercial vehicles (LCVs) like vans, as well as for part-exchange vehicles too.

Is unit stocking finance right for my car dealership and business?

The first consideration for dealers when buying a car with unit stocking finance is whether it is right for the business and car dealership.

At V12 Vehicle Finance, our unit stocking finance facility works by providing used car dealers with a credit limit which is determined during the application process, allowing dealers to get the stock they want for their forecourt, and we offer a single-funded value ceiling of £65,000.

Not only this, our finance agreement allows dealers to get funding, which not only includes the hammer price on cars and LCVs at auction, but also auction fees, refurbishment costs, delivery fees and VAT.

Stock funding can also provide funds to those dealers wanting to make repairs to the cars bought at auction at the auction house's on-site body shops and repair facilities. This saves dealers the time and expense of having to take cars elsewhere before getting them back to the dealership.

a dealer and an account manager looking at a vehicle

Why should I use unit stocking finance?

There are some very good reasons why unit stocking finance works for many car dealers. One of the primary reasons to use unit stocking finance is that it frees up cashflow. With V12 Vehicle Finance, dealers can get up to 120 days of financing to purchase cars for their forecourt, which frees up cash to be invested in other areas of the business.

Payments are also simpler. Rather than having to manage individual finance agreements for all the cars on the forecourt, a dealer simply has one finance agreement for the stock funding facility.

Who should I choose for unit stocking finance?

With many finance providers providing unit stocking finance facilities, another consideration is simply who to go with.

This is where looking at the additional benefits that a finance provider offers is important. For example, look at the technology integrations and auction partners (Link this to partner page on site) that finance providers work with. At V12 Vehicle Finance, we integrate our stock funding facility with our trusted auction partners' platforms, meaning that when dealers go to auctions physically or online, our stock funding facility makes it quick and seamless to purchase stock for their forecourt. This also means dealers can concentrate on listing and selling the car, rather than how to finance it.

We also aim to make the lives of dealers simpler by using our CALMS online finance portal. Through the portal, dealers can easily manage their stocking finance facility and payments.

We're also vendor neutral, which means dealers can choose where to buy their stock from. We do not tie dealers to purchasing from select wholesale or auction partners.

We also have a dedicated stock funding team, who are here to support you with managing your account and getting the necessary support to help you grow your business.

an account manager looking at a vehicle

How do I start my unit stocking finance credit application?

For dealers new to stock funding and considering how to use it for their  dealership and business, don't worry, the process is usually quite straightforward with most lenders.

At V12 Vehicle Finance, in order to make an application for our unit stocking finance facility, dealers simply need to be VAT registered in the UK and have physical premises where customers can view cars/vans for sale. Dealers also must have been operating for at least 12 months and have filed accounts with a positive net worth.

So that's it - some key considerations for why used car dealers should choose unit stocking finance, and where to start. If you want to know more about V12 Vehicle Finance's stock funding facility, head to our finance product page here.

Want to talk to our team? If so, contact us