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DEALERS who have had to knock back car buyers because they could not get the finance approved now have a second chance to make the sale, according to a new sales model started in the United Kingdom.

Under the model, the dealer introduces the buyer to a lease company, Drive-Hive, which buys the car from the dealer and then charges the car buyer a monthly payment for up to three years.

The dealer gets a sale and the motorist a new set of wheels.

The firm started in the UK last week with the promise that it can provide an “all-inclusive” lending solution that could convert car dealer’s finance refusals into three-year revenue streams.

It has already signed up partnerships with 10 manufacturers including Mercedes-Benz, Jaguar, Land Rover and Mazda.

AM Online said while the typical lending criteria is based on credit scores, Drive-Hive judges each applicant on their ability to afford monthly payments.

Drive-Hive director and co-founder, Paula Edwards, told AM Online that customers refused finance in the showroom could be referred at the dealership to Drive-Hive.

“Anybody who doesn’t qualify for finance can be referred to us by the dealership,” she said.

“Drive-Hive will buy the car from the dealer and then lease it to the customer on a three-year contract, putting the customer back into the dealer network.”

The service includes comprehensive insurance, breakdown cover, road tax, servicing and a personal motoring manager over the three years of the lease. The car is then returned.

For the dealers, Drive-Hive said it would retain customers for each brand partner which would bring regular revenue to the dealer network in the form of servicing and repair, and make new cars accessible to near prime consumers.

“We think everyone will win,” Ms Edwards said.

“The monthly fee includes all of the services and is guaranteed not to rise for the duration of the contract,” Ms Edwards said.

“We’ll even pay any parking fines or Congestion Charge fines on your behalf to take the sting out of them.”

As an example, Drive-Hive charges £437 ($A802) a month – including all listed costs – for a Mazda2 1.5-litre manual hatchback. The period is 36 months, costing the applicant £15,732 ($A28,872). A new Mazda2 costs £12,895 ($A23,666 plus on-road costs) new.

Drive-Hive’s launch follows BMW and Mini entering into a partnership with London-based subscription service operator Drover.

Drover has a similar pay-as-you-go leasing model and has a list of new and used cars available for selection by people who need a car for a short – or near-term – period and don’t want to commit to the full price of the vehicle.

The Drover model includes the vehicle rent, comprehensive insurance, roadside assistance, maintenance, routine servicing including tyres, vehicle tax and a free allowance of 1280km a month.

It means that the outgoings on a car a motorist has on subscription would be equivalent to almost five years use of a car if it was purchased (inclusive of on-road costs, servicing, insurance and so on), though there is no trade-in value at the end.

Drover charges £447 ($A820) a month inclusive of all outgoings for a small car such as Ford Fiesta, Volkswagen Polo, Citroen C3 or Honda Civic.

Motorists can select a set period and reap discounts. If the Polo, for example, is taken for three months, the monthly price falls to £400 ($A734), for six months it reduces to £377 ($A692) a month; and for 12 months it is £329 ($A604).

Prices are for a Polo 1.2-litre manual five-door hatchback that is priced at about £15,000 ($A27,530) plus on-road costs in the UK.

By Neil Dowling

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