What financial technology it can do for dealers and customers

Used car finance interactions between car dealers and customers can feel fraught, with lengthy application processes while lenders search for suitable deals.

Purchasers wishing to drive away the same day may become dissatisfied – something advancing financial technology (fintech) can solve, facilitating swift lender decisions that allow dealers to offer competitive finance to more customers.

Though motor traders are familiar with fintech, it can inspire scepticism. Key areas must therefore be addressed to remove barriers to change.

Often, the biggest challenge is the market itself. There are many lenders offering various solutions to dealers (and therefore consumers) but not focusing solely on their needs.

Nowadays, dealers often rely on large lender panels for used car finance, but lack products solely meeting customer and dealer needs.

Solutions streamlined to fit credit profiles and circumstances – including V12 Vehicle Finance Prime – instead give dealers flexibility between hire purchase and personal contract purchase (PCP) products.

Agile, connected digital platforms shorten customer timescales by accelerating previously laborious processes.

Credit risk assessments, for instance, can now be streamlined through machine learning scorecards and automated income verification, all within a heavily regulated environment.

Issues posed by incompatible lender Finance & Income (F&I) platforms are also removed with fully agnostic platforms such as V12’s.

This allows integration with all major F&I systems, simplifying panel integration and removing barriers limiting dealer and customer choice.

Additionally, end-to-end technology – including e-sign solutions and online customer self-service portals – can eliminate paperwork in favour of speed and convenience. These allow 24/7 account access, so customers can easily see outstanding balances without additional steps.

Adopting intuitive technologies and working with like-minded finance partners means dealers can achieve better business and customer outcomes.

In this cost-of-living crisis, long wait times on used car finance approval may lead to cold feet from purchasers, who, lacking adequate ways to monitor outgoings, may also fall behind on payments.

Richard Cox is head of operations at V12 Vehicle Finance