This month, it introduced Capital Bank Extra, which is intended to attract business from customers with ‘below average’ credit ratings (the bank avoids the phrase ‘sub prime’). The typical APR is 13-19%, which it says is competitive.
Capital Bank believes dealers can increase their point-of-sale business by 10% because it has automated processing to make it faster. Its underwriters are promising to support dealers throughout the closure of a loan.
Paul McGill, director at Capital Bank Motor, says: “The Extra product could enable customers to improve their credit rating by taking out finance and paying it off, so dealerships can offer a better deal next time. We are offering dealers training to support Extra.”
Meanwhile, Black Horse is also attempting to increase dealers’ business by giving them more control of loans processing. It says LetsUconnect will simplify processing and make it less vulnerable to fraud.
John Woolley, managing director, Black Horse, says: “Dealers have told us what they want from tomorrow’s finance company. They like the simplicity of LetsUconnect – it is so intuitive and user friendly.”
Point-of-sale activity by leading lenders is happening because, according to figures from the Finance & Leasing Association (FSA), its share of car finance has fallen from 30% to 20% of car finance in a decade.
“What happens if we don’t act?” asks Paul Jordan, a senior director at Capital Bank Motor, whose roles include dealer and staff development. “Eight in 10 buyers now make the finance decision before going into the showroom.”
Capital Bank believes it can take advantage of what it regards as inevitable FSA regulation. It is encouraging dealers to convince customers that they can provide a service that safeguards borrowers under likely tougher rules.
“We have FLA regulation for insurance products, and it’s unthinkable that the Government will not extend it into finance,” he says.
“We’re providing the products, services and support dealers need to protect their future credibility as a finance and insurance provider trusted by consumers.”
Capital Bank’s ‘showdown’ campaign casts the coming battle as a boxing match: ‘dealers (unbeaten) versus the opposition (attacking heavyweight).’
Jordan says: “We have created a programme to encourage dealers to do more to sell finance.”
George Grant, managing director, Capital Bank Motor, says: “Dealers – our customers – are fighting hard to retain their customers, while suffering a skills shortage with their cash flow under pressure.
“We’re positioning ourselves as the dealers’ champion. We want dealers to encourage loyalty among customers, by making POS finance an easier and better experience for them.”
Capital Bank Motor is conducting its annual survey on dealer satisfaction to assess the level of consumer fulfilment when they express interest in point-of-sale finance.
Rachel Smith, Capital Bank Motor marketing manager, says they are also surveying retailers about whether or not to brand Capital Bank Motor more prominently.