Unlock your potential in 2023 with stock funding
Vicky Gardner, Director of Sales Development at NextGear Capital discusses the current used car market and how wholesale funding can help your business grow.
It’s no secret that the used car market is in a volatile state. The knock-on effects of a global vehicle production shortage continue to impact used car supply and inflate prices, while consumer demand becomes increasingly unpredictable as inflation and rising interest rates grip household expenditure.
I wish we could predict what the future holds for our industry, but the reality is that the best we can do is prepare for the now while creating strong foundations for the future.
As the end of the year approaches and the used car market begins to wind down, inevitably dealers’ sights will be set firmly on 2023 and how they can hit the ground running.
Agility in today’s climate is vital. Being able to find where the best used stock is, and be in a position to buy it, not only helps you tackle the supply issues facing our industry but also gives you more options to reduce the likelihood of overpaying for the vehicles you need.
Non-captive stock funding could be the answer for your business. While there are many other funding options out there, including bank loans and captive finance, these often come with conditions that you may not want, or limit where you can buy. I believe for most dealers having a flexible non-captive funding line, such as the likes provided by NextGear Capital, is the key to unlocking your business’ potential in 2023.
Wholesale funding can help your business grow
Wholesale funding can be an essential part of a dealer’s toolkit by encouraging growth. Fundamentally, it gives you the ability to buy more stock without dipping into your own resources, and we often see dealers who partner with us quickly start selling 10/20/30% more vehicles than before.
If you choose to, your own cash is free to be invested in other ways, be it facilities, marketing or people. This can have a transformational effect for some dealers. Of course, not every business is looking to grow at such a rate and in those cases those cash reserves can provide security and peace of mind during uncertain economic times.
Choose where and how you buy
Non-captive funding sources like NextGear Capital have the added benefit of allowing you to buy from a much larger number of stock sources. We partner with 70+ auctions and vehicle wholesalers where the full hammer price plus delivery and buyer’s fees can be settled directly. If buying from another source, including part-exchanges or a private sale, 100% of CAP clean or invoice price can be funded.
With stock supply as it is today, it’s important to be agile so you can buy decisively when the opportunity arises. In a fast-moving market and when prices are high, this can be a form of competitive advantage.
But inevitably there will be times where you’re not looking to buy as many vehicles, and wholesale funding gives you that freedom, unlike other funding sources such as a loan where you will have to pay the total sum back plus interest, regardless of whether you’ve used the money or not. With a stocking plan, you only incur costs when you fund a vehicle, and only for the duration of you having that vehicle on your forecourt. You settle the outstanding sum plus the fee when you sell, that’s it. And you can do this as many times as you like, and with as many vehicles as your stocking plan facility will allow.
Trusted by 1,700+ dealers
NextGear Capital are proud to have supported our 1,700+ dealer customers since 2014, and to date we have funded over 690,000 vehicles in the UK and Ireland, equating to more than £5 billion.
NextGear Capital Stocking Plans are tailored for the specific needs of independent and franchise dealers. We take our responsibility very seriously and have a very experienced team who’ll work with you to fully understand your business and ambition and determine a facility that’s appropriate. Plus, we stay very close to you and adjust your plan as your need evolves. We’ve helped many dealers successfully grow their businesses over the years through this approach.
Want to learn more? Call us on 0343 50 60 600 or book an appointment with one of our Account Managers.