2022 looks set to be a landmark year for the online motor finance industry, during which almost 50% of all car finance applications will be submitted online.
According to the latest data released by iVendi, total online application volumes will increase a further 10% in 2022, compared to last year’s total tally.
The popularity of applying for car finance online has grown dramatically over the past few years, as more people than ever seek to both save money and avoid time-consuming visits to brokers’ offices. In 2019, around 22% of all car finance applications happened online, increasing to 30% in 2020 and 35% in 2021.
According to iVendi, at least 45% of all car finance applications will take place online this year – the highest on record.
The New Norm for UK Car Sales
Speaking on behalf of iVendi, chief executive James Tew set the trend could be attributed to a combination of equally important priorities for UK car buyers.
“The obvious question is, why are we seeing this marked increase, and the answer is that there are a number of converging factors,” he said.
“The first is probably the most obvious. The pandemic has made a relatively large section of the car buying public more comfortable about online processes. While the overwhelming majority will combine elements of a showroom and digital journey, there has probably been a permanent shift towards the latter,”
“Secondly, dealers have moved to meet that need. Many have upgraded their online presence substantially over the last two years and the motor finance journey they are offering digitally is simply better and easier to use, hence more consumers are opting to adopt it.
“Lastly, the technology on offer has continued to improve at a rate that is much better than incremental. The online journeys now offered by companies such as iVendi are more effective, and easier to adopt for dealers and to use for car buyers, plus are better integrated into the whole purchasing process.”
Flexible Online Car Finance Applications
The James Tew chief executive went on to cite the flexibility and potential affordability of online car finance as another key driver of the sector’s record breaking performance.
“In many ways, online motor finance is more customer friendly, allowing the customer to run different variations of the numbers in a way that is difficult when sitting in front of a sales person in a showroom,” he said.
“Systems have done this for many years but the latest iterations, such as Digital Deals, are more efficient than ever,”
“Once they have made a choice, the potential buyer can even check the likelihood of approval online without leaving a footprint on their credit file that is visible to lenders, before they make an application, which is a major plus point for many,”
“For all of these reasons, we expect the swing towards online applications to continue not just this year but to continue to rise substantially for the foreseeable future. While there will always be a place for showroom-based applications, we believe, increasing numbers of car buyers will choose the digital option.”