Dealers Demand Better Integration From Lenders

Dealers are demanding a better online service from finance providers as they themselves look to drive more sales and profit from their used car stock in the face of a slowing new car sector.

Lenders are increasingly being told there must be a higher level of integration with the dealer’s online facility so the potential buyer can have a seamless journey from choosing a car displayed on the retailer’s website through to being approved for, and securing, finance for the purchase.

They also have to be more open to online buyers as there is some evidence that lenders are more reluctant to approve an online application than one being negotiated face-to-face in the showroom.

One lender, Glasgow-based Startline Finance, said providers need to adapt to a changing market as sales increasingly move online and retailers try to squeeze more volume and margin from used sales.

Paul Burgess, CEO, said: “The speed of this development has been really noticeable and is probably indicative of the way in which dealers are quite suddenly taking much more seriously the need to offer motor finance online.

“We have a number of customers who specialise in the mainstream used car market who are having quite a big drive towards maximising the potential of online sales, often based around particular models or types of car at certain price points with PCP. These dealers want their lenders to be able to make the whole process as slick and easy as possible while still maintaining high levels of service and compliance.”

Paul said some lenders are more wary of online application than a `live’ one, adding: “This is something that we hear both anecdotally from dealers and from other lenders, that the kind of customer who would be approved if they are sitting across the desk from you is quite often turned down for an online application.

“To some extent, it is understandable – online is a more physically remote process than providing finance for a customer in a showroom, the profile of applicants is often different, and some lenders are nervous. However, it is also indicative of a slightly old-fashioned attitude to digital business and there is no doubt that some dealers find it very frustrating.”

Startline has seen Q1 2019 growth of more than 20%. Last year it doubled its headcount to around 80 people and last month announced it is creating a further 50 jobs.

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