A dealer looking at his computer screen in an office

Unit stocking finance. What is it? How does it work? What should I consider when choosing a finance provider to work with? These are just a few burning questions that independent car dealers may have about this type of finance. Fear not, as we're on hand with our guide featuring all things unit stocking finance.

What is unit stocking finance?

Unit stocking finance is a credit facility available to car dealers and dealerships to acquire vehicles for their forecourt. The facility can be used to purchase multiple vehicles, such as cars & LCVs, and in addition, to fund part-exchanges and trade-to-trade purchases from platforms like Motorway. You might have previously heard of it as stock funding or stock finance.

How does unit stocking finance work?

Unit stocking finance allows dealers to purchase the stock they want for their forecourts from wherever they want with no initial cash outlay. Dealers can manage stock levels more efficiently by loading and settling vehicles at any time through a dedicated online portal.

At V12 Vehicle Finance, our unit stocking finance facility provides used car dealers with a credit limit determined during the application process. We fund vehicles up to a value of £65,000 and give dealers the flexibility to get the type of stock they want for their forecourt through introductions to multiple auction and remarketing partners.

Questions to ask when choosing a stocking provider to work with

  1. What are the payment and the agreement terms?

First things first, independent used car dealers should check the terms and conditions of their finance agreement with the finance provider. Some providers of unit stocking finance will present dealers with a target to meet to qualify for their stock funding facility. For instance, if you fail to finance a certain number of vehicles with their customer vehicle finance products, you may find your credit limit reduced or not receive the stock funding altogether. Here at V12 Vehicle Finance, we don't work like that. Once you have qualified for our stock funding facility, you are the one who chooses how to use it, and you only pay for what you use.

Meanwhile, some finance providers may charge interest on the value of the facility taken out, regardless of whether you have used the entire facility, and you may be tied into the agreement for a set period even if you don't require the funding. Once again, we don't work like that. With our stock funding facility, you only pay interest on the amount used - think of it as something similar to a credit card.

When assessing the variety of stock funding facilities available, it's important to consider what is known as the 'load fee'. This is simply the fee for buying and funding a car on unit stocking finance. Some providers may charge a high fee for this or an additional fee for settling a car off the funding plan, which can quickly ramp up if your stock turn is high.

  1. What auction partners can I use?

Next, look at the auction partners that your finance provider works with. Are you tied to only buying cars from the finance provider's selected auction partners? Are you free to go to any auction house you want, or do you need introductions to new auction houses? In our case, it's the latter, giving dealers much more flexibility about where to go when sourcing cars for their forecourts.

At V12 Vehicle Finance, we also run exclusive promotions with our partners. In the past, we have run promotions that have included up to 30 days interest-free funding. This means that your purchases' delivery and prep period is essentially 'fee free', and if you sell the car (and settle the loan balance) within 30 days, you won't be charged any interest.

A dealer looking at a tablet at the office

  1. What will the unit stocking finance facility cover?

Our stocking finance facility can cover most costs you may encounter when buying a car from an auction. This includes 100% of the hammer price of the vehicle, auction house fees, delivery fees, VAT, and even any repair fees for the vehicle (up to £1000 value on vehicle refurbishment fees) - remember that not all finance providers may allow you to cover all these fees or even the entire cost of the hammer price of the car - check your finance agreement carefully as you may have to repay up to 20% of your purchases within the first week which limits cashflow.

It's also important to know what vehicles the facility allows dealers to buy, as some providers, for instance, may not allow the purchasing of vans. In our case, you can buy cars and light commercial vehicles, including WAVs, meaning you get that extra bit of flexibility when adding to your forecourt.

  1. How do I qualify for unit stocking finance?

Each finance provider will work differently regarding how they accept dealers for their unit stocking finance facility. We aim to make it as straightforward as possible to apply, as dealers need to:

  1. Be VAT registered in the UK.
  2. Can provide evidence of selling cars for at least 12 months.
  3. Have physical retail premises.


  1. What are the additional benefits of unit stocking finance?

Independent dealers are encouraged to consider any additional benefits a finance provider offers. Here at V12 Vehicle Finance, we know that physical stock audits of a forecourt can often be disruptive to a dealer's everyday operations. This is why we allow dealers to digitally audit cars themselves using our auditing platform.

If the physical method still suits you and your business, don't worry. We still offer a trimmed-down physical audit; you can choose your own audit method at set-up.

Unit Stocking Finance is a great tool, but it does require some management by dealers; at V12 Vehicle Finance, dealers can easily manage their facility through our online platform, essentially making everything almost 'self-service'. Also, if you use a DMS platform, we partner with providers in this space to seamlessly integrate your dealership administration and reduce duplication when loading and settling vehicles. Of course, if you want to speak to our team, our product is also fully supported by a dedicated Dealer Support Team, and we're always on hand to help.

If you want to find out more about V12 Vehicle Finance's Unit Stocking Finance product and how it can help your business, head to our stock funding page.

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