The business, Driva, was founded by Scott Montarello and William Brown and started its trials at the beginning of 2020, well before COVID-19 made its mark.
It has now notched up about 3000 inquiries a month and has grown at the rate of about 35 per cent in each quarter in 2020.
For customers it gives near-instant access to available finance rates and repayments and for dealers it ensures a quick sale, said co-founder and co-CEO Mr Montarello in an interview with GoAutoNews Premium.
Compared with the previous finance application process, he said Drive generates an uplift in finance penetration of 20-30 per cent.
The company says that Driva operates along similar lines to Aussie home loans, giving customers choices on what finance is available and providing comparative rate and repayment schedules.
A major point of difference is that Driva uses its in-house algorithms to find the best finance solution for the customer, Mr Montarello said.
“We built our system with thousands of data points, so an application will look at the 20-plus lenders we have, work with their credit policies and pricing matrices, and find the best,” he said.
“A Driva application takes the customer only about 30 seconds to fill out online and the system will literally take seconds to search for the best solution for the customer.
“That’s a lot different to a lot of the more traditional brokers, especially those that still rely on more manual processes.”
Mr Montarello told GoAutoNews Premium that Driva normally picks up an application within a few minutes of it coming through “and by that point, the customer has already decided on a lender.”
“They’ve already given us all their documents and then we can normally get an approval and sometimes settlement on the same day,” he said.
“In terms of what the customer pays, it varies by lender. It comprises, obviously, the principal repayments to be made each month, the interest on top of that, and some lenders have the origination or brokerage fee, and an establishment fee.
“We put it all into the monthly repayment which allows us to show the customer a clear breakdown of each of those fees, so that the customer knows the total cost. It also allows us to compare apples with apples.”
Mr Montarello said he was aware customers can get confused because different lenders show different repayment costs – some inclusive and some added later.
“We’re trying to make precise comparisons between lenders and in some cases that’s not an easy process,” he said.
Driva started as an idea after Mr Montarello had a “frustrating” finance experience when buying a car in 2017.
“In my case, I only had one lender that was affiliated to the dealership, and that lender wasn’t suited to me,” he said.
“I was frustrated with the process of applying for finance and I could see the dealer was as well.
“The solution wasn’t to add another lender to the pile, because we thought that would only make the market more confusing for dealers and their customers, and we know people like to shop around.
“So the real solution was creating a way for customers and dealers to be able to quickly compare a range of options and then match customers to that option.
“I think that gives the customer a lot of confidence because they have shopped around and compared finance products.
“And for the dealer, this means higher finance penetration and less time wasted processing finance applications.”
Driva has added a plug-in tool for dealership websites which allows them to integrate finance onto their website.
Because of this, Mr Montarello said, Driva is finding an increasing number of customers starting their financing journey online.
“We think it is very important to have a strong online presence for dealerships,” he said.
“We know around 80 per cent of customers research finance before even walking into a dealership. That being said, it’s still critical to have that in-dealership ability to offer multiple finance options to the customer.
“That’s the logical point for the dealer to sit down with the customer and walk them through either the Driva application or just pass them onto us. We can take it from there.”
Mr Montarello said he and Mr Brown had been surprised by how many customers have a budget in mind but haven’t yet decided on the car.
“They may only want to spend $100 a week so we can find finance and then we can put them in touch with dealers that would have a car that would suit those needs,” he said.
Driva operates in all states and is an online business without a shopfront. The administration and development team is in Sydney.
“We’ve been through a testing period since the launch at the very end of 2019 and then we moved to dealers piloting the product,” Mr Montarello said.
“We don’t release numbers of dealerships that use Driva but we have sites in the double digits across Australia.
“So far, it’s been mainly independents that have been using it. We specialise a bit more in the used-car market.
“We are now speaking to a few groups that are looking at using us purely for their online finance offering.”
Driva has investment from Australian-based Invictus Ventures, headed by Peter and Daniel Gammell.
Peter Gammell is the former CEO of Channel 7 and now retired, but is an active investor in finance companies in Australia including the Credible student loan company.
By Neil Dowling