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Web-based loans to replace POS

Over the next 10 years, point of sales finance will continue to disappear.

Dealers will need to counter this loss by capturing the customer earlier on in the process, according to Brendan Devine, GE Money Loans UK chief executive officer.

GE Money will next year launch a web-based system that will help dealers to break into the pre-arranged finance market – around 60% of car finance is arranged before the customer goes to the showroom, and increasingly this is online.

Three years ago, 9% of loans were arranged via the internet; today that figure has risen to 25%.

“Customers will be able to go onto the dealer’s website and sign up for finance at a sensible rate that is pre-approved for the car,” Devine said.

“Dealers manage the rates and terms for individual vehicles so they can manage their stock if they want to get rid of a vehicle quickly – they cab subsidise the finance to offload the car.”

The load rates are advertised within the details for the car. GE Money is partnering with Codeweavers, part of Jigsaw, and will imbed its software into its own system. The product is due to go live at the start of next year.

“It will help dealers to shift more cars. But it will only work if the APR rate is sub 10% - it’s about convenience for the customer,” Devine said.

Craig Goold, GE Money market development manager, Motor Finance, added: “Customers will travel anywhere to buy a car. Everything is accessible apart from the finance. Now it is.”

GE Money is also considering launching a risk-based pricing policy next year, following Black Horse’s move into the market (AM November 2).

“Risk-based pricing will eventually take over, although it will take a long time,” said Devine.

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