WE buy and pay for stuff online. It’s delivered. It’s easy (mostly).
But buying a car is more or less the same process it was 40 years ago – the car maker, the retailer, the in-house or independent finance house. Compared to the super-complex tech going into many vehicles the car buying process remains deeply analogue – still.
So might fintech – essentially the marriage of finance with information technology – make the lease job broker’s job easier and more profitable? Or could it shred the role completely?
Given that 80% of the UK population now buy a car on finance (and many consumers under 30 only buy online) it’s a fair question.
Eben Lovatt, the 22-year-old Chief Executive of lease deal comparison start-up Moneyshake, said fintech doesn’t threaten the lease broker’s livelihood – for the moment.
It’s not 1979 anymore
He said: “Fintech will play a part in getting people to car leasing brokers. Killing the car leasing brokers? I don’t believe it will. I believe it [fintech] will enhance and make their job and processes more efficient.”
Lovatt said fintech – and this is key to his own business model – supports the ‘educational bit’ of the buying journey, putting it in the hands of consumers and letting them reach their own conclusions. Industry insider language is banished.
He added: “Our portal allows people, in their own home, to research what’s right for them and understand what’s right for their own circumstances.
“So when they speak to the partners we work with, the car leasing brokers and dealerships, they’ve made an informed decision.”
Technology makes it comparatively easy for disrupters to enter the market. In Lovatt’s case he has £500,000 of seed investment from the Development Bank of Wales behind him, as well as backing from private investors.
The right deal for Gen Z?
His finance panel is made up of BVRLA members, all FCA-registered and scrutinised for risk issues he said.
Lovatt claims he’s not bothered about the competition and its buying muscle. He’s just focused on targeting those who want to drive a new car without any depreciation worry and has special offers “unique to the market”.
But it’s theway he’s approaching it which makes it different he said. “For us, it’s not about the cheapest deal for the customer. It’s about the rightdeal.”
His company is developing fintech aimed at fleet users for launch in the medium term. For now, private individuals is the focus.
Yet it is the buying journey – how easy it is or not – that the future success of many automotive businesses may well be shaped by.
Millennials are getting older. Marketing, sales and finance still remain distinct automotive entities while many younger consumers such as Generation Z (those born since 1997) have no experience of face-to-face buying negotiation. Buying online is completely natural for them.
Does the digital generation want to know you?
Perhaps not yet but the picture’s changing. Many millennials have grown up without interest in car ownership.
The same goes for Gen Z. But with more stringent environmental legislation outlawing older and ‘dirtier’ cars the convenience of an up-to-date reliable vehicle must grow – especially as once-young people grow older, acquire families, children and pets.
Subscription type services are completely natural to both these generations. Which is where the lease model comes in – if the right software is in place.
Fintech – a brief primer
While big banks have used fintech for their own predominantly large clients (which mean larger profits), smaller SME-type businesses have benefited from fintech innovation, be it online digital loans to crowdfunding.
This has been driven by the mass-market penetration of smartphones as well as distrust of the global banking system since the 2008 financial crash.
Leasing operators who integrate fintech into their contracts, credit and point-of-sales information increasingly have the potential to manage the return-of-vehicle experience too.
Especially if the manufacturer can see cost savings. And if a customer is getting out of one car, they’re probably getting into another. And so the experience could be repeated –seamlessly, hopefully.
You still can find tons of broker jobs on the Jooble search engine.
