The Covid-19 pandemic has changed the way that automotive retailers and finance specialists operate, with digital activity soaring. After an initial period of disruption, however, car dealers, brokers and customers are starting to see the significant benefits that come from digitalisation. Spencer Halil, director ALPHERA Financial services, writes.
The shift to digital isn’t purely a symptom of coronavirus. The pandemic is accelerating long-term consumer and market trends.
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Cloud communications provider Twilio recently published its Covid-19 Digital Engagement Report. In June the company surveyed more than 2,500 decision makers from hundreds of companies worldwide, including 300 UK respondents, to find out how businesses had adapted to the challenges posed by the pandemic.
Notably, it measured companies’ changing digital engagement strategies, finding that Covid-19 had accelerated respondents’ digital communications strategies by a global average of six years. In the UK, the average was estimated at 5.3 years.
Little wonder the report dubbed Covid-19 ‘the digital accelerant of the decade’.
Motor finance and the rise of digital platforms
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By GlobalDataArmed with the tools they need to adapt, motor retailers are at the forefront of this evolution, with support from lenders that have digitalised elements of the finance process.
This rapid change appears to have been matched by growing enthusiasm among customers for using the latest digital tools to research, negotiate and transact a purchase.
ALPHERA Financial Services has witnessed this shift first-hand, with a 67% monthly increase in the number of finance applications successfully completed using its online e-Retail platform since March.
This has been driven by a 50% increase in the number of ALPHERA dealer partners signed up to the platform, with a 72% growth in written volume in September.
Fundamentally, this transition is about putting the control in the hands of the customer, but there are major benefits for dealers too.
Using e-Retail tools immediately makes it easier for dealers to evidence a compliant finance sale, for instance. Automated processes are more consistent and easier to audit and record, and self-service qualification allows customers to make their own choices about suitability, with full transparency of the finance options available.
The e-Retail platform has proven beneficial to ALPHERA partners during the Covid-19 pandemic, enabling remote finance applications during lockdown.
With ongoing and ever-changing social distancing measures in place, use of a finance e-Retail platform means buyers can continue to complete this process remotely, with input from the dealer.
Digital self-service
Further, ALPHERA has seen a 75% year-on-year growth in user numbers for its MyFinance platform between January and September 2020.
MyFinance gives ALPHERA customers the ability to manage their finance agreement online. With over 50,000 people now registered to the platform, more than a quarter of ALPHERA’s UK customers are managing their finance agreements online.
Instead of spending unnecessary time on the phone, customers can use MyFinance to ‘self-serve’, with the ability to update their personal or bank details, change payment dates or marketing preferences, and access all documents relating to their agreement.
Following the coronavirus lockdown period in the UK, ALPHERA has subsequently added a range of new functionalities to the platform.
These include a payment ledger, the ability for customers to express their end of contract intentions, a settlement payment facility, as well as a contract mileage calculator.
In most instances, it can be faster and more convenient for customers to use a digital platform like this, rather than contact a call centre.
The role of the dealer in a digital world
Justifiably, dealers may harbour a concern that they will have fewer opportunities for customer interaction. This need not be the case, with retailers now free to explore new ways to adapt the role they play in the car purchase process.
Introducing a customer-centric, digitalised sales process means dealers should look at ways of positioning themselves as trusted and reliable experts. Arguably, this will prove more appealing to many customers than the idea of dealing with a ‘seller’.
Instead, retailers and finance specialists will be there to provide the right information at the right time to customers.
The peace of mind for the dealer – and the lender – stems from the ability to evidence that information is consistently delivered and complete in every case.
Embracing change
Car buyers are increasingly comfortable using digital tools to complete a purchase or ‘self-serve’. Out of necessity, dealers across the UK have seen for themselves what years of acceleration looks like for digital processes in just a few months.
Covid-19 has accelerated a long-term trend, but face-to-face interactions won’t disappear. The most successful dealers will focus on making this element of the sales process valuable to the customer.
