"2015 marked the continued rise in point of sale motor finance, with over 80% of consumers choosing dealer-based POS finance to purchase new cars in the 12 months to October 2015 (according to the Finance & Leasing Association).  

This strong penetration continues to be boosted by significant year on year changes in PCP volumes, up 18% and 35% year on year on new and used cars respectively.  

For Northridge Finance, 2015 was another exceptional year which saw new business lending up 15% on 2014.

It’s also worth commenting on the remarkable percentage increase in new car leasing, up 66% on the 12 months to October 2015, as hirers start to consider ‘usership’ against ownership.

Drivers are looking to simplify how they obtain the use of vehicles, and they appear to be increasingly happy to strip out the requirement of owning one if they can use clearly laid out and justified finance deals to do this.

However as an industry, there can be no resting on laurels - we have to challenge the norm, seek new approaches to provide products and enable dealers to enjoy the benefits of the repeat customer armed with the very best financing deal available to them.

The perception of vehicle ownership is shifting, and the way consumers pay has to keep up.

As people become better informed customers armed with a wealth of information available from the internet, coupled with a market operating under increasing but appropriate regulatory demands, its simplicity and transparency that’s becoming the platform from which lenders build their products and processes.

Standard APR based pricing is becoming more and more in vogue across the majority of main funders. Whilst the lowest monthly payment is a key driver, it is of course vital the customer has the correct product to suit their individual needs.

The market’s key messages in 2015 was about improving ‘customer journeys’ and enabling better ‘customer outcomes’ through transparent methods.

Northridge worked hard to accomplish this – we removed all customer acceptance fees and enhanced our eDoc365 online document signing facility, speeding up vehicle delivery but still capturing that vital audit trail.

For us, we see the market rewarding retailers more than ever before on how the customers have been treated.

The Society of Motor Manufacturers and Traders predicts that in 2016 registrations will top 2.6 million again, so it is reasonable to expect the market to remain buoyant. Consumer transparency will remain at the forefront of competitive advantage.

The moves we have made and are making to improve products and processes to our customers are necessary to provide more support to the retailer and end customer. All of them will help lead to a stronger, transparent and more accountable industry, for the benefit of everyone involved.

2016 will be a year of “keep it simple”, but it will be a vital one for the future direction our industry."

Author: Alan Carson (pictured), sales director at Northridge Finance