Evolution Funding, the largest motor finance broker in the UK, has published record online car finance applications, boosting its year-on-year average by 95%. The sharp incline for car finance companies is believed to be due to the impact of COVID-19, with one in four motorists saying they are prepared to buy a car online without seeing it first*.
The figures are great news for car finance firms who were expected to be hit hard by the impacts of the latest global health pandemic. However, as the statistics highlight, consumers appear more than willing to apply to serve themselves online before completing the final details in-person.
Evolution group sales director, Chris Coverdale, believes that this kind of trading will “become the norm as social distancing measures continue and consumer behaviour adapts.” Evolution’s online proposals as a percentage of overall proposals was 32%, compared to 21% in 2019**.
What led to the switch?
While the Coronavirus pandemic has accelerated the growth of online finance applications for car finance companies, it isn’t the only factor to affect the sector.
Ian Plummer, commercial director of Auto Trader, confirmed that “there’s been a broad digital acceleration from all parts of the automotive landscape.” Still, the tools were already in place, with Evolution Funding reporting a 27% increase in proposals through their online finance calculator.
Also, the Financial Conduct Authority confirmed in April that the payment holiday for finance and lease customers would be extended by three months.
With the car finance industry frozen since the start of the lockdown, and only recently reopening, call volumes have skyrocketed by 200% as shoppers and existing customers seek assurances in unpredictable times.
Of course, the effects of COVID-19 are still visible. Only 145,377 new car registrations were recorded in June 2020, a 35% decrease from the previous year.
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