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How is F&I affecting the used car sector?

Our operations director, Steve Lees, recently shared some insight into how F&I is affecting the used car sector. If you missed the news, you can catch up here…

Statistics from the SMMT (February 2019) reveal that, despite a drop in used car sales of 2.1% – which is not as severe a decline as the new market – it is still the third highest year on record since 2001.

Many experts predict the UK used car market will become the automotive industry’s focus for growth in 2019. But, why is this and what role will F&I play? Steve Lees, operations director at DealTrak offers his thoughts…

New car market pressures

The impact of WLTP has caused significant fluctuations in not only the new car sales, but also the ability of manufacturers and dealers to secure adequate supply to fulfil customer needs. When you add in the negative messages surrounding diesel cars, the shifting landscape continues to fuel the pressures and instability within the new car market.

The ongoing uncertainty over Brexit and the wider economy was further highlighted by Ford Motor Company’s recent announcement regarding future production concerns. The firm continues preparations to move production abroad amid fears of a no-deal Brexit.

In light of these factors, dealers, finance lenders, and value-added product providers must drive more value from the used vehicle areas of their businesses in order to flourish during these troubling times.


Figures from the FLA for 2018 show that, for new cars bought with finance at the point of sale, advances grew by 3%, whilst the number of cars fell by 3%.

For used vehicles though, the trends are remarkably different. Advances grew by 13%, while the number of used vehicles sold on finance grew by 7%.

These statistics support the view that used vehicles will drive business performance in 2019, and that finance will play a key role within that success.

With the percentage of private, new car sales financed by FLA members through the POS at over 90% in the twelve months to December 2018, dealers and lenders should be heavily focused on achieving higher levels of finance penetration in their used car businesses.

Value Added Products

Value Added Products (VAP) are a common extra to be offered to car buyers, regardless of whether they opt for a finance package or not. VAPs protect the customer and their vehicles as well as providing additional revenue opportunities for dealers.

A growth in used vehicle performance could also create additional opportunities for customer satisfaction and retention by, as an example, an enhanced extended warranty offering driving more contact with the customer through the vehicle ownership cycle, resulting in more workshop hours and demand for parts.


It’s clear that regulatory pressures on the sector are here to stay. Forward-thinking dealers are embracing the requirements positively and effectively while remaining dedicated to delivering great outcomes for their customers as a result.

Successful dealers will be using technology to deliver a consistently compliant approach for their customers – and one which is rolled out across their dealership networks.

By adopting best-practice, firms will become more customer-focused and compliant, while delivering strong business results to boot.

There is a huge opportunity for dealers, lenders and VAP providers if they choose to embrace the opportunity for F&I sales within the used car market.

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