Motor finance companies are being urged to develop a wider range of products to suit the complex needs of used car buyers.
There could be up to five different levels in the used car market that require bespoke products and services, but the industry continues to try to serve all of them with one or two products, according to Paul Burgess, chief executive officer of UK-based Startline Motor Finance.
He said: “What is clear to us is that there is a much wider spectrum of finance needs in the market. Quite how many is difficult to say but it would not be a stretch to suggest that the market should perhaps be operating over at least five identifiable levels that are easily understandable to dealers and car buyers.
“It’s not just a matter of providing a kind of single sliding scale to cover different levels of risk; it means developing an understanding of different groups of customers with different requirements and delivering products that meet those desires.”
Startline Motor Finance has developed a near-prime finance product to bridge the gap between prime and non-prime lending, with research indicating two-thirds of dealers believe it will play an important role in their future business, particularly in the event of a recession.
Burgess added: “What the market really needs is more innovative products. We have plans ourselves, but there are other customer demographics and characteristics where opportunities lie and it is really up to motor finance providers to meet them.”
Startline Motor Finance provides motor finance solutions to UK motor dealers and is headquartered in Glasgow, Scotland.
