Unit Stocking

khendrie

Hi All,

I have seen a car for sale on autotrader which has a hpi report supplied by the dealer - the report from the dealer shows no outstanding finance on the car - but when I do my own independent check it comes back with finance attached to the car in the form of 'Unit Stocking' 

Is it safe to buy from a dealer that has unit stocking finance attached to the car - I tried looking it up and some are saying its not legal for a dealer to sell a car with finance attached - but is Unit Stocking a separate thing?

Appreciate any advice,

Cheers 

facade

Most large dealers have their stock on finance. They just don't have the capital to commit to 200 cars @ £10,000 each.

They get a deal, like a credit card, where they don't actually pay interest for a certain time, e.g. 3 months, then they bounce the cars back to auction or trade with another dealer before the interest charges kick in. (They pay a credit fee instead which is way cheaper and how the finance company makes money)

This is why they don't rectify any faults until you pay a deposit, as it would be a waste of money if they are getting rid of the car.

Bottom line, stocking finance is normal, the dealer will pay for the car when you have paid them (and they have the money)

Nearlyold

Just to confirm as Facade says "Unit Stocking"  is perfectly normal and nothing to worry about.

Goudy

Yes, dealers often use a form of mercantile credit to buy stock.

As a general rule, you can't sell something you don't own.
So something with normal retail credit on it can't really be sold as it's title is owned by the finance company.

Mercantile credit is a form of business to business credit that has some different rules than normal retail or consumer credit.
It's allows them to finance and sell that financed stock without having to own it outright as the funder (credit company) loses title to the item once it's sold, if the sale is in good faith.

It's perfectly normal these days but if you have any worries, talk to the dealer.

khendrie

@facade @Nearlyold @Goudy

Thanks peeps - I appreciate your comments.

Bigwheels1111

Good man, trust nobody.