TRADITIONAL face-to-face banking is shrinking as the digitisation of personal finance accelerates.
People are more engaged, in control and financially informed than ever before. To compete in this digital finance landscape, dealer finance needs to be price competitive and customer controlled.
MotoNovo’s risk-based pricing model, MotoRate, allows dealers to let potential customers adjust a finance quote using a self-assessment tool based on their individual credit rating to create a tailored, competitive interest rate and the capacity to switch between HP and PCP finance options. It is all part of a new streamlined Self-Serve finance journey.
MotoNovo’s Head of Platform Phil Morgan said that while regulation has been a driver of change, it should not be viewed in isolation. “Regulation is central to the evolution of dealer finance, but I suggest that it is social and digital developments that are forcing the pace. In an increasingly digital landscape, dealers should look to the development of an end-to-end finance tailored finance journey and they must be competitive in interest rate terms.”
He sees the importance of three primary steps:
- The customer’s ability to locate their ideal car, tailoring it to their needs
- A capacity to access an accurate part-exchange valuation
- The capacity to develop a tailored finance offer with end-to-end capability
Today’s car buying community expects that the experience should be low friction and price competitive. The personal loan community offers some very competitive interest rates and very commonly full online proposal and fulfilment capabilities.
Morgan said: “I accept that change will be challenging, but in no small way, this is about survival. Failing to promote competitive tailored finance rates risks steering customers away from the dealer journey as might the absence of online self-serve tools.
“I entirely see a continuing role for the showroom, but much like the evolution of High St banks, this will be as a service lounge, performing a crucial part of the purchase journey experience. However, if we do not get steps 1-3 right, I am concerned that they may never get there.”