The battle for captive auto finance business in the future will be won – or lost – in the world of digital real estate.
And the reasons are obvious – when more than half of Generation Y (people born between the 1980s and early 90s) car buyers would currently prefer to visit the dentist than haggle with a car salesman – and when many view visiting a car showroom “rather like visiting a funeral”.
The disruptors in the shape of the new breed of financial technology (Fintech) companies have already spotted where the demand lies in the new generation of car buyers.
With Gen Y buyers forecast to be accounting for around 75% of all new vehicle sales by 2025 – you will have to get your selling approach correct – or you’ll be dead on the water.
A BMW report into consumer purchasing behavior revealed that whereas in 2003 car buyers made an average of four visits to a showroom prior to making a purchase.
By 2013 this had diminished to 1.5 visits.
Also in 2003 only 1% of car buyers researched their car online before making a purchase – by 2013 this had risen to 92%.
Soon they will be making the purchase itself online – by their mobile phone.
To combat this, captive finance auto companies need to revolutionize their websites especially with regard to video content and mobile optimization until they become designed as mobile-first.
Previously the battle to win car sales was fought out in the showroom – but no longer, because Millennials and Gen Y buyers will simply not be there.
Author: Jonny Combe, general manager product and channel development at BMW Group Financial Services. White Clarke Group is a provider in end-to-end automotive and asset finance software solutions and consulting services. Combe was a speaker at the recent White Clarke Group Auto Captives Summit.