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The motor finance industry is “ripe for disruption” as customers demand more pay-per-drive models of ownership.
That’s a finding of a whitepaper, co-authored by Capita and Finativ, which said financial houses urgently needed to wake-up to a model of private car ownership that encompasses the vehicle, insurance and fuel.
“Banks already have the technology to enable speedy customer verification, authentication and credit-approval processes – all must haves for the sector to move towards a “pay-per-drive” model.
“Yet many financial institutions have been slow to apply this to motor finance and leasing for fear of alienating traditional dealer and franchise relationships,” it said:
“Even for a sector facing considerable challenges, the opportunities are ripe for a finance provider to become the customer’s go-to for all aspects of car ownership: the vehicle, finance to suit bespoke mobility requirements, and the technology to support car-sharing and easy mobile payments,” it added.
Publication of the report aligns with the appointment of Harish Naidu to the new role of associate client partner for motor finance at Capita Experience, part of Capita plc.
Aparajita Ajit, managing director for Capita’s financial services businesses, said: “The current model for private car ownership – paying separately for the vehicle, insurance, and electric/fuel – could soon go the way of smoky diesel engines. We book all-inclusive holidays, so why shouldn’t the ownership package of a car include all aspects of ownership?
“The winners of the hearts and wallets of tomorrow’s car buyers will meet the needs of a generation more accustomed to Apple Pay and the Spotify subscription model than more traditional payment methods. The message to the existing motor finance players is clear: do not risk getting caught sleeping at the wheel.”