Offering online motor finance is a key method of driving engagement for vehicle retailers, new research by iVendi shows.
It asked which funding options consumers considered ahead of their next vehicle purchase and easily the largest group – 47% – said they looked at motor finance from a retailer web site.
They were followed by buying from savings at 40%, using a non-retailer online motor finance provider at 31%, banks loans at 26%, and a loan from friends or family at 12%.
The findings are taken from a new iVendi white paper, “Driving future success: Five key trends in online motor retail,” which questioned 1,000 recent vehicle buyers about their preferences.
Darren Sinclair, CCO at iVendi, said: “Some retailers understandably want to maintain the showroom’s status as the key touchpoint for consumers, and there is sometimes a perception that offering motor finance online discourages in-person visits.
“However, our experience – backed up by this new research – is that withholding motor finance from the retailer web site is almost always a negative. If consumers can’t find what they want online, they tend to leave and look elsewhere. Offering online motor finance drives engagement and increases sales.”
The research also asked respondents how they interacted with the online tools offered by motor finance providers, and the results were very supportive of the technology. The majority – 88% – felt communication with the retailer was made easier by such services, 66% said they used online motor finance tools to generate quotes, and 64% used online information and tools to research different motor finance products.
Sinclair added: “What online motor finance does is allow the consumer to progress the sale in their own time, and providing tools that make this possible – finance calculators, eligibility checkers and online applications – all provide momentum.
“Retailers offering consumers the means to progress and complete vehicle purchases create not only another sales channel alongside their showroom, but also a lower cost format with advantages such as greater customer engagement and a potentially faster stock turnaround.
“In our experience, the best results for consumers, retailers and lenders come from offering a multi-lender online solution, allowing vehicle buyers to identify the best solution for them. This delivers choice and therefore drives engagement and compliance. Ultimately, it simply leads to more finance being sold.”
There is, however, a warning note for retailers in the iVendi data. Respondents were also asked how easy they found it to access information about the vehicle, the retailer, and the type of motor finance they were considering on the retailer’s web site.
These were scored from one to ten, and totalled 67% (vehicle), 62% (retailer), and 55% (motor finance). This indicates that motor finance information, though valued by consumers, can be relatively difficult to find.
Sinclair said: “This is a slightly worrying finding. It suggests that consumers had an appetite for online motor finance but a large proportion had trouble reaching the tools and the information they wanted. Retailers must make sure that their digital motor finance proposition is properly presented and easily available. Of course, this is our area of expertise and we can provide highly effective advice.”
The “Driving future success: Five key trends in online motor retail” white paper can be downloaded for free.