IT’S well known that the ability to expand the use of dealer finance will be important for dealerships in the post-November regulatory environment. With this objective in mind, Macquarie Leasing has been working with a number of large dealer groups to test and refine new processes and tools designed to support dealers in streamlining the car finance sales process for customers.
Developed after a significant amount of research with car buyers, the new finance sales model will increase the transparency of dealer finance options within the dealership and help make the application process easier and more efficient to complete. Increasing consumer propensity to use dealer finance will require addressing any misconceptions about the value of dealer finance options – and for this, clarity will be very important.
Trials currently underway in dealerships are providing greater visibility of rates and product information, and using new digital tools designed to educate and inform consumers about the dealer finance process, to test if these factors will make customers more likely to consider dealer finance. Early results look very promising.
Also, to assist dealers to originate finance, a new front-end origination system has been launched. This provides more intuitive screens and streamlined quoting and application processes, which focus on driving clarity for customers and ease of use for business managers.
While the new process is still being refined with dealerships, it is expected to be available more broadly over coming months.
The main features of the new process include:
- Risk-based pricing that aligns a customer’s interest rate with their risk profile.
- A new “customer rate finder”, that helps customers determine their individual rate, based on their vehicle, product and credit profile.
- Tools for car buyers and business managers for tracking the progress of each loan application.
- The ability for customers to upload required documents and sign application forms from home.
- A settlement pre-booking service to align monthly loan repayments with salary payments.
Centralised access to regulations and policies for business managers.
These changes are designed to benefit both dealers and customers; supporting dealers in improving sales penetration and delivering a clearer sales process for customers.
New online tools and sales processes are just the first step in a range of new initiatives designed to support dealers’ success in the new regulatory environment. With dealership finance penetration rates closer to 80 percent in the US and the UK, this suggests there is considerable room for growth for Australian dealerships. This is just the start of the journey to transform dealership finance, and make it even more competitive for Australian car buyers.
Russell Bryant is the division director – national manager, strategy & transformation at Macquarie Leasing
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