Car dealers and finance providers are seeing increased levels of motor finance uptake with pre-approval technology, according to iVendi.
The automotive e-commerce and finance company, which introduced pre-approval a year ago with its Finance Navigator platform, said the uptake rate from vehicle buyers had risen when the feature was used from 47% to 56%.
Lenders using the pre-approval feature include Admiral, Ayan, Tandem and Zopa.
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The feature means that if details entered by the dealer and consumer into the platform’s motor finance comparison search are accurate, a deal will automatically be offered by participating lenders on the terms quoted, without a formal application being needed to confirm the proposal.
James Tew, CEO at iVendi, said: “What this means for the consumer is effectively, instant motor finance. By clicking on the pre-approved option, they can access funding to buy a vehicle almost immediately.
“This technology has now been available for a year, which means we can compile meaningful data showing there is a definite preference among vehicle buyers for pre-approval.
“The overall increase we are seeing of 9% over non-approved choices is a significant difference in terms of motor finance penetration.”
Rejection rate ‘negligible’
Tew said that in practical terms, pre-approval reduced the motor finance rejection rate to close to zero.
He said: “As long as the details entered are correct, the rejection rate is negligible, which makes the motor finance process much more efficient for consumers, lenders and dealers. It’s an innovation that delivers faster, easier motor finance.”
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The Finance Navigator platform allows dealers and customers to carry out quick searches in the showroom or online across all lenders in a dealer’s panel, returning results in less than 10 seconds with factors including monthly payments, specific finance rate, likelihood of approval and availability of pre-approval, using real-time tender policy and credit score information.