Almost a quarter of used car retailers have turned to Government-backed COVID-19 recovery loans or overdrafts to fund their forecourt stock since lockdown, NextGear Capital has found.
Responses to the latest dealer sentiment survey commissioned by Cox Automotive’s funding arm showed that 13% of dealers have used the Bounce Back Loan Scheme or Coronavirus Business Interruption Loan Scheme (CBILS) to stock up their forecourts, while 22% have used an overdraft facility.
NextGear Capital said that the number of dealers turning to overdrafts has risen sharply since last polled dealers on their funding practices in October 2018.
Back then just 9% cited overdrafts as a source of wholesale funding.
An increased number of dealers are also using their own cash to fund their stocking operations – 78% now versus 47% in 2018.
The insight from NextGear comes just days after the Finance and Leasing Association (FLA) urged Government to not ‘prematurely