David Nield, Managing Director at V12 Vehicle Finance (V12VF) answers a few questions regarding the industry, wholesale finance and help for dealers.
- What changes have you seen in dealer behaviour during lockdown, and how has this changed in the lead-up to showrooms re-opening?
Lockdown reinforced the value of resilience and adaptability. Many of the dealers we work with responded swiftly to the changes and have since made huge strides in improving their digital footprint.
Over the last 12 months, dealers have had to move away from physically sourcing their stock. For many, this has proven a more efficient way to source vehicles and an easy route to do business with auction partners nationally.
We've also seen social media play a bigger role in operations, with dealers turning to Instagram and TikTok to showcase their new stock and tap into a younger, more tech-savvy audience.
While there will always be the need for a forecourt presence, many dealers will continue to promote and source stock digitally as another sales avenue. Blending both online and physical offerings provides a full toolkit for dealers to attract a range of customers, while providing convenient options for buyers.
- What finance options have dealers turned to help with stocking for re-opening?
Over the last two years, there's been a clear trend for dealers to have multiple funding partners and options in order to tailor their finances to support their specific needs and ambitions.
As a finance provider, we're committed to supporting our dealers through every step of their journey and remaining as flexible as we can to provide a bespoke solution. We also work with a wide range of partners to help dealers source the right stock and streamline their finances.
Alongside this, we offer trade plans to assist dealers with any issues and part-exchanges they want to monetise, which we've seen an uptick in demand for. The benefit of working with a non-captive finance company means dealers can buy from wholesale and trade sources as and when they want to.
- What key trends have you observed in wholesale finance so far in 2021?
We've found that sourcing the right stock, at the right price, remains a pressure point for dealers. New entrants to the market like Motorway have sparked a rise in both new vendors and dealers moving away from traditional methods of wholesale finance and trying something new.
Ultimately, dealers want simple and easy-to-use systems with simple payment methods to speed up the process for their customers at both onboarding and payout stages of the relationship. As a result of this demand and the additional restrictions put in place by funders, we feel it's important to offer services like next day payments or the ability to pay a car off by faster payment to ease this pressure.
We've also seen ongoing demand for LCVs. In fact, demand has now reached record levels which has driven an uplift in prices. Conversion rates at auction remain high, making sourcing LCVs more difficult for dealers. Buyers are now willing to pay a premium for this stock, so having wholesale funding in place for both cars and commercial vehicles is vital.
It's important for finance providers to stay at the forefront of emerging trends so processes can be changed or pivoted in order to suit the evolving needs of their dealers and partners.
- How do you think dealers will use finance going forward, as restrictions continue to lift?
As restrictions continue to ease, we suspect many dealers will be reviewing their entire business model to boost their efficiency in the coming year. Coupled with the expected boom in car sales post-lockdown, dealers will be turning to new funding options to help them achieve this and tap into demand.
Dealers who already have funding in place but have scaled back their growth ambitions during the pandemic will start to consider how funding can support their future plans, with buying more stock and selling more vehicles at the helm.
- How will you look to continue to help dealers going forward?
Our plans for 2021 and beyond are simple: more partnerships, a great service and working closely with our dealers to identify their challenges. We have recently enhanced our finance options with the introduction of our new hire purchase product (HP) for the Prime market so we can support even more dealers.
Alongside this, we work with a wide range of partners which allows our dealers to do more in one place. Dealers can source, manage, fund and finance stock for their retailer customers end-to-end using streamlined digital technology.
Our mission is to help dealers save time, reduce costs and maximise sales and revenue so they can speed up their sales cycle and do it more often. We also have a dedicated team of experts who are always on the lookout for new ways of doing things and sourcing new parts which will ultimately benefit our dealers and their customers.