Table of Contents
Why customer financing changes dealership sales
How the agreement between finance company and dealership works
The main finance companies that work with independent dealers
Typical requirements to access a financing agreement
How to compare conditions before signing
The regulations you need to know before brokering financing
Dealcar and the management of financed operations
Frequently asked questions
Why customer financing changes dealership sales
A dealership that only sells for cash has a market ceiling defined by buyers who can pay the full price upfront. One that offers financing can reach buyers who have monthly payment capacity but do not have the capital available for a cash purchase.
Read also how to sell instalments instead of price when financing a car.
In Spain, around 35-40% of used cars are sold with some type of finance. For a dealer selling 20 cars a month, activating finance can mean between 7 and 10 additional transactions per month with buyers who otherwise would not have been able to buy. At an average margin of 1,600 euros per vehicle, that is between 11,000 and 16,000 euros of additional monthly gross margin, plus brokering commissions.
The other effect is on the average ticket. A financed buyer tends to buy a higher-priced car than one who pays cash, because their purchasing decision is based on the monthly instalment, not the total price. This increases the average ticket and the margin per transaction.
Check how much a car dealer makes and what variables move the margin.
How the agreement between finance company and dealership works
The dealership does not lend the money directly: it acts as an intermediary between the buyer and the financial institution. When the buyer decides to finance, the dealership submits the application to the finance company, which assesses the client's risk and approves or denies the transaction. If approved, the finance company pays the price of the car to the dealership and the buyer pays the finance company in monthly instalments.
The dealership receives an intermediary commission for each financed transaction. This commission varies depending on the entity, the amount financed and the monthly volume of the dealership, but is usually between 1% and 3% of the financed capital. In some cases, there is also a fixed fee per transaction.
Read also how GAP insurance works as an additional source of income.
For this model to work, the dealership must have a signed agreement with the finance company and, in most cases, be registered as a credit intermediary in accordance with current regulations.
The main finance companies that work with independent dealers
Santander Consumer Finance is the entity with the largest presence in the automotive sector in Spain. It works with dealerships of all sizes, including independent used car dealers, and has a relatively accessible sign-up process. Its conditions for small dealerships are more conservative than for large groups, but it has the advantage of being widely known by buyers, which makes closing deals easier.
Cetelem (BNP Paribas) has a similar profile: wide presence, sign-up process for independent dealers and consumer credit products for used vehicles. Its acceptance of medium risk profiles is somewhat more flexible than Santander's, which can be advantageous for buyers with a less-than-perfect credit history.
BBVA Consumer Finance works mainly with larger dealership networks and manufacturer agreements, but has specific lines for the used market with access requirements for independents. It requires a minimum volume of transactions to keep the agreement active.
Cofidis is an interesting option for dealers working with buyers of a more varied risk profile. Its approval process is faster than that of traditional banks and it accepts profiles that other entities reject, although with higher interest rates for the buyer.
CaixaBank Payments operates through its agent network and has a presence in the used vehicle financing segment. Access as an independent dealer usually requires a minimum annual volume of transactions.
Finance companies specialising in automotive such as ALD Automotive, Arval (for used leasing vehicles) or platforms like Abanca Automoción have specific products for the used market with more flexible structures than traditional banks.
Finance Company | Profile | Ease of access for independents | Approval speed |
|---|---|---|---|
Santander Consumer | All segments | High | Medium (24-48h) |
Cetelem | Varied profiles | High | Fast (a few hours) |
BBVA Consumer | Medium-high volume | Medium | Medium (24-48h) |
Cofidis | Higher-risk profiles | High | Very fast (minutes) |
CaixaBank Payments | Minimum volume required | Medium-low | Medium |
Typical requirements to access a financing agreement
Requirements vary depending on the entity, but there is a common set of conditions that most require before signing an agreement with an independent dealer.
Business age: usually between 1 and 2 years of activity as a dealership or used car business, with registration in the corresponding economic activities tax (IAE). Some entities require 3 years for their most favourable conditions.
Minimum turnover: between 200,000 and 500,000 euros annually depending on the entity. This is the most common filter for small dealers who want to access larger entities.
Clean credit history: both of the business and, in some cases, of the owner or administrator.
Registration as a credit intermediary: mandatory to legally operate as a finance intermediary (see next section). Some entities manage the registration process for their partner dealerships themselves.
Verifiable physical premises: most entities carry out a verification visit or check the physical existence of the business before signing the agreement.
Civil liability insurance: in some cases, specific insurance linked to the financial intermediation activity is required.
How to compare conditions before signing
Signing with the first finance company that makes an offer is a common mistake. Conditions between entities can vary significantly in the points that most impact dealership profitability.
The points to compare are: the commission percentage per financed transaction (how much the dealer makes per sale), the average interest rate for the buyer (a lower rate facilitates more sales), the approval rate of applications (what percentage of the applications you submit are approved), the approval and payout time (how much time passes between application and payment to the dealer), and the lock-in conditions or minimum volume of the agreement.
Read also how ASNEF affects the sale of used cars.
The most efficient approach is to negotiate with two or three entities in parallel, obtain written conditions from each, and compare them. Entities know there is competition and in many cases improve their initial terms if they see you are evaluating alternatives.
Also review the application submission process: some entities have digital platforms that greatly speed up the process, while others work with paper forms or managers who are slow to respond. Approval speed directly impacts the customer's buying experience.
The regulations you need to know before brokering financing
Brokering consumer credit on a regular basis is regulated in Spain by Law 5/2019 and by the consumer credit regulations derived from the European directive. To operate legally, the dealership must be registered with the Bank of Spain as one of the following:
Tied agent: acts exclusively on behalf of one financial institution and under its responsibility. This is the most common setup for dealerships working with a single finance company.
Non-tied credit intermediary: can submit applications to several entities. Requires registration with the Bank of Spain, certified training, civil liability insurance and compliance with transparency requirements with the consumer.
Check the complete guide to the REBU for dealerships to understand how it fits with financial intermediation.
Financial institutions usually guide the dealer through the registration process as part of the onboarding process to their network. If you work with several entities at the same time, you need the status of a non-tied intermediary, which has more demanding requirements but greater operational flexibility.
Operating without the corresponding registration exposes the dealership to administrative sanctions and the nullity of the brokered financing contracts. It is not a procedure that can be bypassed.
Dealcar and the management of financed operations
From Dealcar you can register each transaction with its associated financing information: entity, financed amount, approval status and expected commission. This gives you visibility over how many of your sales include financing, which entity is bringing in the most volume and how much you are generating in brokering commissions each month.
This information, which without a centralised system requires manual spreadsheets, is the basis for negotiating better conditions with finance companies when volume justifies it. If you want to see how the management of financed files works in Dealcar, request a demo at dealcar.io.
Frequently asked questions
Can I work with several finance companies at the same time?
Yes, and it is highly recommended. Working with two or three entities allows you to submit the application to the one most likely to accept the buyer's specific profile, and offers alternatives when one entity rejects the transaction. To operate with multiple entities, you must be registered as a non-tied credit intermediary.
What happens if the finance company rejects an application?
It is part of the standard process. Rejections occur due to risk factors of the buyer (ASNEF, debt capacity, employment status) that the dealership cannot control. Having access to several entities with different approval criteria reduces the impact of rejections: what one rejects, another might approve under different conditions.
How long does it take to activate an agreement with a finance company?
It depends on the entity and the available documentation. With complete documentation (IAE registration, last two financial years, Bank of Spain intermediary registration), the process can be closed within 2 to 6 weeks. Some more agile entities resolve it in less than 2 weeks if the profile is standard.
Does customer financing affect the REBU?
The REBU (Special Scheme for Used Goods) applies to the profit margin of the vehicle sale, which is the difference between the purchase price and the sale price. The financing that the buyer contracts with the finance company is a separate transaction that does not alter the tax regime of the vehicle sale. The commission the dealership receives for financial intermediation is taxed as ordinary income, outside the REBU.
What happens if the buyer stops paying the instalments?
In the standard intermediation model, the dealership does not assume the risk of default: that risk is assumed by the finance company. The dealership has collected the price of the vehicle at the time of the sale. The relationship between the buyer and the finance company (including default management) is between them. There are models with buy-back guarantees or other specific clauses in some agreements that can modify this risk distribution, so it is advisable to review the contract with the finance company in detail.
Table of Contents
Why customer financing changes dealership sales
How the agreement between finance company and dealership works
The main finance companies that work with independent dealers
Typical requirements to access a financing agreement
How to compare conditions before signing
The regulations you need to know before brokering financing
Dealcar and the management of financed operations
Frequently asked questions
Why customer financing changes dealership sales
A dealership that only sells for cash has a market ceiling defined by buyers who can pay the full price upfront. One that offers financing can reach buyers who have monthly payment capacity but do not have the capital available for a cash purchase.
Read also how to sell instalments instead of price when financing a car.
In Spain, around 35-40% of used cars are sold with some type of finance. For a dealer selling 20 cars a month, activating finance can mean between 7 and 10 additional transactions per month with buyers who otherwise would not have been able to buy. At an average margin of 1,600 euros per vehicle, that is between 11,000 and 16,000 euros of additional monthly gross margin, plus brokering commissions.
The other effect is on the average ticket. A financed buyer tends to buy a higher-priced car than one who pays cash, because their purchasing decision is based on the monthly instalment, not the total price. This increases the average ticket and the margin per transaction.
Check how much a car dealer makes and what variables move the margin.
How the agreement between finance company and dealership works
The dealership does not lend the money directly: it acts as an intermediary between the buyer and the financial institution. When the buyer decides to finance, the dealership submits the application to the finance company, which assesses the client's risk and approves or denies the transaction. If approved, the finance company pays the price of the car to the dealership and the buyer pays the finance company in monthly instalments.
The dealership receives an intermediary commission for each financed transaction. This commission varies depending on the entity, the amount financed and the monthly volume of the dealership, but is usually between 1% and 3% of the financed capital. In some cases, there is also a fixed fee per transaction.
Read also how GAP insurance works as an additional source of income.
For this model to work, the dealership must have a signed agreement with the finance company and, in most cases, be registered as a credit intermediary in accordance with current regulations.
The main finance companies that work with independent dealers
Santander Consumer Finance is the entity with the largest presence in the automotive sector in Spain. It works with dealerships of all sizes, including independent used car dealers, and has a relatively accessible sign-up process. Its conditions for small dealerships are more conservative than for large groups, but it has the advantage of being widely known by buyers, which makes closing deals easier.
Cetelem (BNP Paribas) has a similar profile: wide presence, sign-up process for independent dealers and consumer credit products for used vehicles. Its acceptance of medium risk profiles is somewhat more flexible than Santander's, which can be advantageous for buyers with a less-than-perfect credit history.
BBVA Consumer Finance works mainly with larger dealership networks and manufacturer agreements, but has specific lines for the used market with access requirements for independents. It requires a minimum volume of transactions to keep the agreement active.
Cofidis is an interesting option for dealers working with buyers of a more varied risk profile. Its approval process is faster than that of traditional banks and it accepts profiles that other entities reject, although with higher interest rates for the buyer.
CaixaBank Payments operates through its agent network and has a presence in the used vehicle financing segment. Access as an independent dealer usually requires a minimum annual volume of transactions.
Finance companies specialising in automotive such as ALD Automotive, Arval (for used leasing vehicles) or platforms like Abanca Automoción have specific products for the used market with more flexible structures than traditional banks.
Finance Company | Profile | Ease of access for independents | Approval speed |
|---|---|---|---|
Santander Consumer | All segments | High | Medium (24-48h) |
Cetelem | Varied profiles | High | Fast (a few hours) |
BBVA Consumer | Medium-high volume | Medium | Medium (24-48h) |
Cofidis | Higher-risk profiles | High | Very fast (minutes) |
CaixaBank Payments | Minimum volume required | Medium-low | Medium |
Typical requirements to access a financing agreement
Requirements vary depending on the entity, but there is a common set of conditions that most require before signing an agreement with an independent dealer.
Business age: usually between 1 and 2 years of activity as a dealership or used car business, with registration in the corresponding economic activities tax (IAE). Some entities require 3 years for their most favourable conditions.
Minimum turnover: between 200,000 and 500,000 euros annually depending on the entity. This is the most common filter for small dealers who want to access larger entities.
Clean credit history: both of the business and, in some cases, of the owner or administrator.
Registration as a credit intermediary: mandatory to legally operate as a finance intermediary (see next section). Some entities manage the registration process for their partner dealerships themselves.
Verifiable physical premises: most entities carry out a verification visit or check the physical existence of the business before signing the agreement.
Civil liability insurance: in some cases, specific insurance linked to the financial intermediation activity is required.
How to compare conditions before signing
Signing with the first finance company that makes an offer is a common mistake. Conditions between entities can vary significantly in the points that most impact dealership profitability.
The points to compare are: the commission percentage per financed transaction (how much the dealer makes per sale), the average interest rate for the buyer (a lower rate facilitates more sales), the approval rate of applications (what percentage of the applications you submit are approved), the approval and payout time (how much time passes between application and payment to the dealer), and the lock-in conditions or minimum volume of the agreement.
Read also how ASNEF affects the sale of used cars.
The most efficient approach is to negotiate with two or three entities in parallel, obtain written conditions from each, and compare them. Entities know there is competition and in many cases improve their initial terms if they see you are evaluating alternatives.
Also review the application submission process: some entities have digital platforms that greatly speed up the process, while others work with paper forms or managers who are slow to respond. Approval speed directly impacts the customer's buying experience.
The regulations you need to know before brokering financing
Brokering consumer credit on a regular basis is regulated in Spain by Law 5/2019 and by the consumer credit regulations derived from the European directive. To operate legally, the dealership must be registered with the Bank of Spain as one of the following:
Tied agent: acts exclusively on behalf of one financial institution and under its responsibility. This is the most common setup for dealerships working with a single finance company.
Non-tied credit intermediary: can submit applications to several entities. Requires registration with the Bank of Spain, certified training, civil liability insurance and compliance with transparency requirements with the consumer.
Check the complete guide to the REBU for dealerships to understand how it fits with financial intermediation.
Financial institutions usually guide the dealer through the registration process as part of the onboarding process to their network. If you work with several entities at the same time, you need the status of a non-tied intermediary, which has more demanding requirements but greater operational flexibility.
Operating without the corresponding registration exposes the dealership to administrative sanctions and the nullity of the brokered financing contracts. It is not a procedure that can be bypassed.
Dealcar and the management of financed operations
From Dealcar you can register each transaction with its associated financing information: entity, financed amount, approval status and expected commission. This gives you visibility over how many of your sales include financing, which entity is bringing in the most volume and how much you are generating in brokering commissions each month.
This information, which without a centralised system requires manual spreadsheets, is the basis for negotiating better conditions with finance companies when volume justifies it. If you want to see how the management of financed files works in Dealcar, request a demo at dealcar.io.
Frequently asked questions
Can I work with several finance companies at the same time?
Yes, and it is highly recommended. Working with two or three entities allows you to submit the application to the one most likely to accept the buyer's specific profile, and offers alternatives when one entity rejects the transaction. To operate with multiple entities, you must be registered as a non-tied credit intermediary.
What happens if the finance company rejects an application?
It is part of the standard process. Rejections occur due to risk factors of the buyer (ASNEF, debt capacity, employment status) that the dealership cannot control. Having access to several entities with different approval criteria reduces the impact of rejections: what one rejects, another might approve under different conditions.
How long does it take to activate an agreement with a finance company?
It depends on the entity and the available documentation. With complete documentation (IAE registration, last two financial years, Bank of Spain intermediary registration), the process can be closed within 2 to 6 weeks. Some more agile entities resolve it in less than 2 weeks if the profile is standard.
Does customer financing affect the REBU?
The REBU (Special Scheme for Used Goods) applies to the profit margin of the vehicle sale, which is the difference between the purchase price and the sale price. The financing that the buyer contracts with the finance company is a separate transaction that does not alter the tax regime of the vehicle sale. The commission the dealership receives for financial intermediation is taxed as ordinary income, outside the REBU.
What happens if the buyer stops paying the instalments?
In the standard intermediation model, the dealership does not assume the risk of default: that risk is assumed by the finance company. The dealership has collected the price of the vehicle at the time of the sale. The relationship between the buyer and the finance company (including default management) is between them. There are models with buy-back guarantees or other specific clauses in some agreements that can modify this risk distribution, so it is advisable to review the contract with the finance company in detail.
