No more car finance? Will car dealers disappear?

No more car finance? Will car dealers disappear?

25 February 2022 Concept Car

Car dealers don’t have the best reputation. And yet, each year, they’re helping thousands of UK citizens get behind the wheel. As banks and credit unions are losing their commanding position as finance brokers in the car industry, dealers have taken over. Today, they are one of the main reasons why even those with a bad credit rating can still secure a loan.

But things are changing.

Some say that dealer financing is collapsing.

On the one hand, slowly but surely, car markets are following the rest of the economy online. On the other hand, manufacturers are trying to increase their share of the pie by dealing with customers directly. (i.e. selling cars without dealerships)

Both developments would spell trouble for UK dealers who have suffered badly from the pandemic as is.

More importantly, they would spell trouble for anyone looking for an affordable car loan!

Are you one of them? And are you worried? We can relate. Read on to find out if car dealers are truly on their way out – and what that would mean for you.

The car market is special.

Before we get into the potential problems of the automobile industry moving online, let’s be perfectly clear about one thing: The car market is a temporary exception to a simple rule: Every single product will eventually be sold on the web in the future.

It is remarkable, therefore, that the volume of cars sold on the Internet is still puny by 21st century standards.

In a way, it would seem obvious that online automobile sales would lag behind the general trend. The first products to make the transition to the virtual world were mostly high volume and low value – Amazon earned its first billions almost exclusively on books and CDs.

Since then, a lot has changed. It is by no means weird at all to go shopping for expensive designer watches on the web, some of which command prices that extend well beyond those of a cheap used car. How to explain this disparity?

Further Reading:
Car and Racing Inspired Watches: History & Design

Lemon trouble - Concept Car CreditLemon trouble

The reason may well be that cars – and we’re not trying to put down any lovers of beautiful time measuring devices – are somewhat more complex than watches. Which means that there are quite a lot more details to pay attention to. And there’s definitely a lot more that could potentially go wrong.

And, alas, a lot still does go wrong when people buy vehicles.

Which is why we’ve written many blog posts about the best vehicle inspection check lists or what to pay attention to when inspecting a car that’s for sale.

In fact, economists have written complicated papers about how hidden problems in used cars can lead to a so-called market for lemons, where cars are over-priced and don’t offer good value for money.

Further Reading:
The Best Vehicle Inspection Checklists in the World

Nothing like buying a car

Being able to inspect the car with your own eyes and hands is one part of the benefits of a physical dealership. Responsibility is another. Physical dealerships offer a sense of security – at least you always have someone to turn to if things should go wrong.

Still today, many cars in the UK are transferred directly from consumer to consumer as a private sale. This can be a fantastic deal and prices do tend to be lowest here. But it wouldn’t be the first time that the seller suddenly disappears after the transaction has been made – taking the money AND the car with him.

Dealers could be ruthless in the past. But they have long evolved into reliable partners regulated by industry guidelines and consumer protection laws. This makes buying a car at a dealership one of the most secure purchases you can make.

Feeling is believing

The way we buy and consume music in 2022 has changed considerably compared to your parents’ generation – no one in the 70s or 80s could ever have imagined streaming the new Abba album!

Buying a car, however, is still pretty much the same thing. It’s almost beautifully old fashioned in a way:

  • The sales talk before committing.
  • The haggling.
  • The handshake and the paperwork.
  • And then, if we’re talking about a new car, the wait until your order has been shipped and is ready for pickup from the lot.

Although few people enjoy all aspects of this process, most prefer to keep things this way in general. For many of us, a car is the second most expensive thing we’ll ever commit to. So knowing there is a trustworthy way that this is handled is not the worst thing in the world.

What are the “Three Sees” of dealer finance? - Concept Car CreditWhat are the “Three Sees” of dealer finance?

Some industry experts have translated the sentiment of UK car buyers into a formula called the “three sees”:

  1. See your car,
  2. see your keys,
  3. see you later.

Which simply means:

At a dealer you can actually touch and feel the car, you know you’ll actually get the key and you’ll ultimately drive off the lot with your new vehicle no questions asked.


A key word in the industry is transparency. Buying a car online is a little murky, this train of thought goes. Buying at a dealership is more transparent.

Is this actually true?

We believe it is:

  • A dealer can answer any questions you may have about the vehicle in person.
  • She can go through the MOTs performed on the car with you and explain what they mean.
  • They’ll typically check the vehicle themselves before selling it and therefore know what you need to be aware of.
  • A dealership can assist you in finding the car that’s right for you not just in financial terms, but also when it comes to your needs.

Online car market places are catching up by offering plenty of photos to show problematic parts of the car or damages. They provide all of the important documentations as PDFs or scans. Often, you can even send the responsible sales person a personal email if you should have any questions.

But it goes without saying that a visit at the dealership easily beats these points in terms of providing true transparency.

Manufacturers want more.

Manufacturers have probably the most to gain from buyers going online more often.

Although retailers like Amazon are still the go-to-model in most industry sectors, the car industry is certainly pretty unique in that direct to consumers sales are virtually non existent here.

Manufacturers have tried to get more direct contacts in by setting up their own banks and luring drivers in with attractive loans.

So far, however, little of this has shaken up the market and fundamentally changed the way we’re buying cars. Which is mostly because the used car market is so much bigger than the one for new models.

As of 2022, there are a few reasons why this could be about to change - Concept Car CreditAs of 2022, there are a few reasons why this could be about to change:

  1. Used car prices have soared so much that the difference between old and new has shrunk to its smallest for decades. In some cases, you can actually get a factory new models for less than a comparable second hand car.
  2. Electric vehicles are gaining ground and popularity. But there is not yet a serious second hand market yet. This has allowed the big brands to establish one on one relationships by selling their cars directly.
  3. After many difficult years, car makes are once again in the driving seat. They have a lot of cash to spare and little interesting investment possibilities. As a result, setting up their own network of dealerships suddenly seems like a good idea. Tesla has already successfully pioneered the approach . Other manufacturers are eager to follow in its wheel tracks.

Clearly, the makes will have to tread carefully so as not to alienate dealers too much.

But it does seem likely that the two worlds are about to come closer together and that dealers will face increasing competition.

Big players want online car sales to happen.

As we mentioned, cars are one of the biggest investments for many UK citizens. Clearly, then, there is still a lot of money to be made in this industry. Little wonder, then, that investors have moved into the market to try and squeeze as much out of it as possible.

This is why plenty of online platforms are now based specifically around selling cars on the Internet. These platforms look trustworthy, offer the kind of documentation we mentioned before and will often be supervised by actual engineers and experts who can pre-screen the cars on sale here.

The days of the Wild Wild West in the online car industry are well over. - Concept Car Credit

The days of the Wild Wild West in the online car industry are well over.

The new players are placing their bets on a simple assumption: People really want to leave the old model of car buying behind. They hold no interest in haggling, little interest in the dealer as an assistant and just want an easy way to get the car they want at a good price.

Already, the feedback from online car buyers suggests that once you’ve flipped the switch, there’s no going back. Brands like Cazoo are experiencing explosive gains and hope to sell more than 100,000 cars in 2022. That’s still only a small percentage of the overall volume – but if they keep going at this rate, those figures are going to look a lot more impressive very soon.

Further Reading:
It’s not just safe to buy a car online. It’s great!

Besides, it doesn’t have to be black and white.

If the current developments in the online market have taught us one thing, then it’s this: The future is a hybrid. Not only have brick and mortar shops gone digital. Already today, brands which were once staunchly online-only have moved into the other direction, setting up their own physical outlets.

Especially in the car market, this seems the way to go.

The web is the perfect place for a first contact: You can get a fantastic overview for what’s on offer and pre-pick a selection of suitable vehicles. The information that’s out there can be a great help in weeding out the wheat from the chaff.

Then, setting foot in a physical location satisfies the three sees and clinches the deal.

What role will dealers play in all of this?

It’s not quite certain yet. But it does look likely that they will hold on to their key role in the buying process. They still have the required profile to accompany the buyer on the final part of the way towards a sale. And they offer the reliability and physical accountability that online brands or even many manufacturers do not as yet have.

At CCC, we have certainly taken all the important steps for giving you the best of both worlds: Browse our selection of used vehicles on our website. Use email or phone to discuss questions, details and financial arrangements from the comfort of your home. Then, drop by our Manchester showroom for everything else.

Does that sound good? Then get in touch with us now. Either by calling us at 0800 093 3385 or by sending us a message.

25 February 2022 Concept Car