Firstly, I want to start by wishing you a Happy New Year. I hope you had a very successful end to 2021 and thankyou for your business during the past year. 2021 has been a challenging year for the whole of the used car industry where business has had to constantly adapt and evolve to stay in line with guidance and advice implemented as a result of the COVID pandemic.

‍

I want to share some interesting data with you, and outline some of Finset’s plans for this coming year that we have processed to help increase and drive volume for your dealership.

‍

Last year the car industry witnessed an unprecedented increase in the valuations of cars, with over 27% growth across all sectors of the industry since January 2021. There was a slight readjustment in valuations in both November and December which reduced prices marginally.

‍

The Finance and Leasing Association reported a drop of 11% in new business volume in October 2021 when compared with October of 2020. However, value of new business showed only a 1% reduction in October 2021 when compared to new business of the previous year, October 2020.

‍

Used car finance new business has increased by 4% in value, due to the price increases and shortage of stock in the market. However, the market for used car prices has contracted by 10% in terms of deals financed in October 2021 when compared to October of 2020. The average balance of a used vehicle purchased on finance in October of 2021 has risen to  15,000. This increase is likely driven by car prices increasing through supply and demand, but we also feel this drive is as a direct result of dealerships and you are dealer partners offering a more innovative customer experience for your customers. Steps we have noticed that are driving business forward are;

‍

• advertising,

• technology (walk around videos), and

• excellent preparation standards of cars

‍

These 3 key elements

*Taken from www.fla.org.uk/research/motor-finance/

‍

Finset’s figures last year correlate with the general trend of the market with the average balance financed increasing by just over 13% from December 2020 through to December 2021. The total amount funded in December 2020 compared to December 2021 grew by 450%. With the increased volume and data we can draw down, we are able to share some of the key metrics that may be able to assist your business this year:

‍

Top 5 Cars financed in 2020;

‍

• VW GOLF

• BMW 3 Series

• Ford Fiesta

• Nissan Qashqai

• Mercedes C Class.

‍

These cars appear to be very generic but delving deeper, the cars financed most were all of a higher specification to

include;

‍

• GOLF GTD’s

• 3 Series M Sport

• Mercedes C Class AMG line

‍

We will be continually monitoring market data and analysing industry specific trends and anything we notice that is driving consumer purchasing habits, we will relay to you.

‍

In the past year with lockdown restrictions now easing, the number of lenders on our panel has grown. The appetite to write business in the last 6 months of the year has grown as uncertainty about returning to normality has now eased. This has been helped by the ending of the furlough scheme which has provided confidence for our lenders regarding an applicants job security. This additional financial certainty has helped to increase acceptance rates and conversation within Finset.

‍

At Finset, we foresee 2022 being positive for all business yet we our mindful that it will come with its own fair share of challenges, be assured Finset are ready to evolve and adapt as required. We commit to supporting you our dealers by understanding the key principles of the market and being prepared to react to any fast-paced changes that may arise.

‍

December of 2021 provided us with some key data as to some challenges we may face. The Bank of England has increased interest rates by 0.25% for the first time in three years. *Inflation in December 2021 was also at 5.1% in the UK which is the highest rate in 10 years. You may ask why is this important? The cost of living for consumers is going to be at an all-time high this year, add in Brexit, rising fuel cost and the increase cost of bringing goods into the UK we can understand why financially this could become an issue. As a result budgets may have to be readjusted for many families and strict monthly budgets may need to be administered.

‍

*Taken from www.bloomberg.com/europe

‍

The data above suggests we must be able to offer as many finance products to allow customers to make informed decisions and give them as many possible ways to buy a car whilst remaining compliant and making sure all of our decisions are made with the customer at the forefront.

‍

This year we believe compliance and meeting the Financial Conduct Authority’s recommendations regarding ‘ how we conduct ourselves’ will likely be the most integral part of the industries approach this year. At Finset every decision we make and the information we provide to your customers, who apply through Finset, is transparent and informative, something we pride ourselves on. Our system ensures the best outcome is received by your customer via our lender panel. You can be confident that using Finset protects you, and your customer.

‍

In the early part of this year, we are expecting some exciting new lenders to be added to our panel which will increase our competitiveness in the PCP arena, with residual values becoming stronger. This will enable us to enhance the offering we are providing to your business and increase the finance options available to you. This will allow us to fund any vehicle on your behalf and in-turn allow you to increase car sales as a result. This information will be communicated once they are aligned within our system.

‍

Fraud unfortunately again early this year is rearing its ugly head, and this is just a reminder to you, to be vigilant at all times. The extra checks that we do, differentiate ourselves from a lot of other brokers but also protects your business when the transaction is carried out. Fortunately, through the past year we have managed to identify any fraudulent applications through our rigorous inspection processes. We understand that some partners feel our security checks are extensive but please feel reassured. These checks are vital in today’s society where fraud is becoming more complex and risk is at an all time high. Providing just a driving licence as proof of identity is no longer sufficient for a finance agreement. The enhanced proofs we have implemented will help manage and mitigate these risks as proven in the past year of trading.

‍

Finally, I would once again like to thank-you again for your business throughout 2021. Our team is looking forward to an exciting 2022 where our businesses will continue to grow together. We our committed to increasing units sold whilst increasing finance penetration. Please do not hesitate to contact me should you have any queries of how we can assist you further.

‍

Looking forward to hearing from you.

‍

Graham Westwood

Founding Director

‍

‍

‍