Agency and finance worries grow, stocking the biggest concern for dealers

The agency model and availability of motor finance are growing worries for used car dealers.

August’s Startline Used Car Tracker showed that when asked about the biggest challenges facing them for the future, the agency model was mentioned by 27% of respondents, the highest monthly figure recorded since this factor was added to the research in January, while the availability of finance was mentioned by 51%, its peak for this year.

Paul Burgess, CEO at Startline Motor Finance, said: “The cost of living crisis has no doubt affected motor finance availability, with some lenders tightening their criteria as individual personal finances are placed under increasing pressure. This is an understandable response to current economic conditions but it does underline the need for dealers to construct a lending panel that meets a variety of customer needs and provides a variety of risk appetites.

“The growing worry over the agency model is interesting because, at first glance, it doesn’t directly affect used car dealers. However, there is perhaps a growing level of concern that it could impact on already tight used car supply, with manufacturers using their new agreements to attempt to control vehicles through their second and third lives.”

The changeover to electric vehicles (EVs) is also an increasing worry, mentioned by 61% of dealers, its highest figure since January.

However, stock availability remains the biggest overall concern at 67%, but this is less that the 89% seen in May.

Burgess said: “While dealers are not worried about stock availabilty to the same extent seen a few months ago, it is clearly still the foremost issue occupying them on a day to day basis. Supply of used vehicles is a problem that is not going away anytime soon, even if there are signs that the situation is easing.”