AM Online

Online used car finance to more than double in three years 

James Tew, chief executive, iVendi

Almost one-in-two motor finance applications made during 2022 will happen online, according to new figures compiled by iVendi.

The company says that across its vehicle retailer user base, it expects to see 45% of applications made by customers digitally and remotely, rather than in the showroom as part of a traditional sales process.

James Tew, iVendi's chief executive, said this represents a rise from 35% in 2021, 30% in 2020 and 22% in 2019, which is “indicative" of the trend.

He said: “The pandemic has made a relatively large section of the car buying public more comfortable about online processes. While the overwhelming majority will combine elements of a showroom and digital journey, there has probably been a permanent shift towards the latter.

“Secondly, dealers have moved to meet that need. Many have upgraded their online presence substantially over the last two years and the motor finance journey they are offering digitally is simply better and easier to use, hence more consumers are opting to adopt it.

“Lastly, the technology on offer has continued to improve at a rate that is much better than incremental. The online journeys now offered by companies such as iVendi are more effective, and easier to adopt for dealers and to use for car buyers, plus are better integrated into the whole purchasing process.”

The Finance and Leasing Association (FLA) has warned that inflation could peak at 8% in the first half of 2022 after the global economic outlook weakened following Russia’s invasion of Ukraine.

In 2021 the consumer car finance market grew 2% by volume and 13% by value in December to completed a “rebound” despite the headwinds of COVID-19 and vehicle supply shortages.

Tew said that many online motor finance journeys now offer a degree of flexibility that meant customers could “play” with the main variables behind each deal - handing them control.

He said: “In many ways, online motor finance is more customer friendly, allowing the customer to run different variations of the numbers in a way that is difficult when sitting in front of a salesperson in a showroom. Systems have done this for many years but the latest iterations, such as Digital Deals, are more efficient than ever.

“Once they have made a choice, the potential buyer can even check the likelihood of approval online without leaving a footprint on their credit file that is visible to lenders, before they make an application, which is a major plus point for many.

“For all these reasons, we expect the swing towards online applications to continue not just this year but to continue to rise substantially for the foreseeable future. While there will always be a place for showroom-based applications, we believe, increasing numbers of car buyers will choose the digital option.”

Click here for digital marketing best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


No comments have been made yet.