Innovation in used car dealer finance can be fundamental to the ‘new normal’ environment for car buying and retailing that is emerging as the UK comes out of lock-down. MotoNovo is leading the way as it announces the full launch of its new, ground-breaking MotoRate finance pricing product that promises to be a positive move for dealers and car buyers, as the results from an extensive pre-lock-down pilot reveal:
- An increase in dealer finance penetration of at least 40%
- An increase in the sale of added-value products
- Increased chassis profitability
- Increased stock-turn
- Very positive responses to the new level of customer transparency delivered.
Central to the success of MotoRate’s risk-based pricing approach are:
- The capacity to provide lower headline Representative APR’s
- A transparent pricing approach where the interest rate is defined by the customer’s circumstances, not the dealer as sought by Financial Conduct Authority (FCA) in their review of the motor finance sector
- An opportunity to increase used car finance penetration significantly
Pointing to the appeal of MotoRate, MotoNovo CEO Mark Standish notes: “As we emerge into the ‘new-normal’, we have an opportunity to redefine the dealer model and finance can be an integral part of this change. Where new car finance penetration is running at over 90%, led by low headline rates; the lack of transparency on used finance sees penetration levels often below 20%.
“At a stroke, we can change things; driving up finance penetration with highly competitive rates; embrace FCA requirements; let customers’ control their finance journey and remove some of the negative perceptions of dealer finance promoted in the media. The feedback from the pilot of over 100 dealers could hardly have been more encouraging.”
The pilot dealers have helped to refine the product and their responses have been very positive, as the following feedback from Cardiff Cars Sales North reveals;
“The result has far outweighed the expectations that I had. From a sales point of view, it has had a fantastic input on conversion rates, without imposing on the customer’s interests, so complying with treating customers fairly. The feedback from our customers has been amazing, as part of our ethos, is that customers need to feel comfortable and know that they can trust us, so this product suits our style of sales perfectly.
I have definitely noticed an increase in our finance penetration, and accepted to written finance has increased way beyond our initial hopes with this product. Our bank conversion rates have also increased, and our customers are benefiting from lower competitive rates. We cannot fault this product, and hope that this is the way forward.”
Standish concludes: “At a time when we need fresh thinking, the pilot dealers’ responses have been extraordinarily positive. The capacity to promote a highly competitive span of rates has been a great marketing tool that is increasing trust, underpinning a new way of working that works for dealer and customer.”