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Getting online motor finance right ‘is crucial to profitability’ in 2019
Getting their online motor finance offering right will be crucial to the profitability of many used car dealers in 2019, says iVendi
With trade prices so high that making a worthwhile margin is increasingly difficult, dealers are relying more and more on motor finance to make a profit.
James Tew, iVendi’s CEO, said: “We are seeing a convergence of two trends. One is that more customers are completing some or all of their used car purchase online, including motor finance. The other is that motor finance is becoming more and more important to dealers, who are faced with a market where trade and retail prices have moved ever closer.
“What this means is that dealers increasingly need to look to online motor finance and make sure that they are offering something appropriate to their customer base – but this remains an area where the quality of what dealers offer varies widely.”
Tew said even the smallest independent dealer should be offering some form of finance calculator, while larger businesses should have comprehensive processes that enable customers to look at different products from a range of lenders, to check their eligibility, to make their application and to complete documentation online.
“It is an obvious statement, but the dealers who put the most effort into online motor finance are the ones who get the best results.
“What we find time and again is that there is a large group of used car buyers – around four out of five, according to our research – who are confident about the prospect of using online motor finance. However, the majority of those consumers believe that the motor industry lags behind others when it comes to online.
“It’s like the old Kevin Costner film, Field of Dreams. ‘If you build it, they will come.’ Dealers who invest time, effort and money into online motor finance sell more cars online and more motor finance. Customers are primed and ready – it is dealers who are lagging behind them.
“However, in 2019, we may be reaching a point where dealers will no longer be able to afford to ignore the opportunities that online motor finance offers if they want to continue to make a decent level of profit.”
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