Spanish Dealers Filling Credit Gap Left by Banks
Executive Summary
A survey of 250 dealers shows 60% financed most of the vehicles they sold in 2014, up from 45% in 2012. The practice was more common among high-volume dealers.
MADRID – Auto dealers and automakers in Spain are taking vehicle financing into their own hands as banks keep credit restrictions in place since the recent economic crisis.
According to a survey of 250 dealers by consulting company DBK, 60% financed most of the vehicles they sold in 2014, up from 45% in 2012.
The report says 76% of dealers that sold more than 750 vehicles last year provided financing for more than half of them. Among dealers who sold fewer than 100 cars, only 33% participated in financing.
“These figures show the clear relation between dealer size and financing capacity,” DBK says.
The report notes a trend toward so-called customized financing for new vehicles, especially those at the high end.
One such deal from Volkswagen Finance, extended this month to individual customers in Spain, offers a Porsche Cayenne Diesel for a down payment of €22,757 ($24,715) and initial “arrangement fee” of €1,571 ($1,705), followed by 47 monthly payments of €650 ($706) and a final payment of €35,984 ($39,081), for a total of €90,862 ($98,622).
Dealer financing of used-car sales also is rising, with retailers saying they provided loans for 28.4% of the used cars they sold in 2014, up eight percentage points from 2012. Loans for some 73.2% of the used cars they sold originated with their respective brands’ financing arms, compared with 78.4% of new cars.
