Buying a car is a nerve-racking process. Spending a lot of money on a product that often has an unclear history can be scary, especially when you consider that many buyers will use a finance package to fund their vehicle. Thoughts of Arthur-Daley-type characters have haunted buyers. The thought of salesmen in sheepskin jackets selling dodgy cars with dodgy warranties used to be a constant worry.
The latest figures from inside the industry show that those old fears have almost completely disappeared in today's professional motoring marketplace. Car purchasing finance packages are now trusted more than they have ever been. That's why more and more customers are using this quick and convenient way of buying their cars.
The industry's trade body the Finance & Leasing Association (FLA) has just released figures for August 2012 showing that increasing numbers of British customers are buying cars through personal finance packages. Using specialist providers (like Creditplus.co.uk) and dealer finance, more than 100,000 cars were bought by consumers in that month alone.
Over the past twelve months almost 70% of private new car sales were bought using finance packages like those available on this site. That's a record high. It's an indication of just how far the car finance industry has come. This figure was below 45% just a few years ago, when buyers were less confident of taking car finance packages.
The FLA and their members have certainly played a big part in this dramatic improvement. Despite the gloomy financial outlook, specialist car finance providers have seen their business grow this year. Creditplus, for example, has seen a rise of 4.8% in car finance applications for the first eight months of 2012, compared to 2011.
Paul Harrison, Head of Motor Finance, at the FLA says: "Motor finance has become increasingly popular with consumers because of the competitive and flexible range of products available, the array of discounted finance deals on offer and because the industry has increasingly provided a customer-centred approach."
The FLA has spent the last five years introducing rigorous new professional standards for staff who arrange car finance deals. Under the strict rules of the Specialist Automotive Finance (SAF) initiative, all employees of participating businesses that deal with customers now have to complete a competence test every year. A dealership or group can only apply to become 'SAF Approved' once all the necessary staff have passed the SAF test and the company adheres to FLA best practice on treating finance customers fairly.
"These new standards mean that employees' knowledge of finance products and the relevant regulations are thoroughly assessed," says Harrison. "This not only builds the skills, confidence and knowledge of staff, it provides reassurance to consumers who find themselves dealing with an increasingly professional service."
Shaun Armstrong, managing director of Creditplus, says: "The SAF initiative has ensured dealers have the knowledge that is needed to help their customers obtain car finance. It is also a useful training tool for specialist car finance providers. Consumer confidence is vital in the finance sectors and having a trained advisor that can re-assure and guide customers through the finance process is a big advantage." Specialist car finance brokers like Creditplus are seeing business boom because they can offer a customer the best finance product to suit their needs, not just the finance offering a particular dealership has available.
SAF Approved dealerships range from the UK's largest retail groups down to one-site businesses. In fact, more than a fifth of all UK showrooms now participate in the initiative - that's almost 40,000 staff at over 2,000 dealerships. The FLA's Harrison adds: "Our efforts to help professionalise the service don't end there. All 50 of the biggest dealer groups are expected to be SAF Approved by the end of the year and we are doing our utmost to further increase numbers year on year. "
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