Independent retailers offering PCP funding on used cars have an opportunity to grow their sales during 2018 but may be challenged by new contract hire companies, according to Adesa Remarketing.

Adesa reported that last year 1.36 million used cars were purchased using point of sale dealer finance, according to the Finance and Leasing Association, and said that the figure was "set to grow" because of the volume of used cars expected to enter the market after the record breaking new car registrations achieved in 2015 and 2016.

Adesa Remarketing UK’s managing director, Jonathan Holland, believes non-franchised dealers offering competitively priced used car PCPs will have the advantage, however.

“PCPs have become the norm in the new car market as buyers move away from the concept of needing to own their vehicles,” said Holland.

“They have proven to be particularly popular with millennials coming into the car market and looking at monthly budgeting, with a fixed price, rather than outright ownership. Dealers are now finding that used PCPs are resonating with these buyers.”

“The independent sector needs to prepare for the possible challenge posed by contract hire and leasing companies, who have easy access to vehicles, by making sure they have the best possible stocking lines in place and are able to offer customers competitive PCPs.

“We are seeing a growing number of independents taking advantage of sourcing stock online, when it first becomes available, rather than waiting for physical auction sales.

“Stock sourcing is an incredibly competitive business and the most successful independents are buying online and upstream and retailing the vehicles immediately with used car PCPs.”