MotoNovo has launched a new finance pricing product for the used car market that it says can increase dealer finance penetration by at least 40%.
The product, MotoRate, is said to have the capacity to provide lower headline Representative APR’s, a transparent pricing approach where the interest rate is defined by the customer’s circumstances rather than the dealer (as sought by Financial Conduct Authority in their review of the motor finance sector) and an opportunity to increase used car finance penetration significantly.
MotoNovo CEO Mark Standish said: “As we emerge into the ‘new-normal’, we have an opportunity to redefine the dealer model and finance can be an integral part of this change. Where new car finance penetration is running at over 90%, led by low headline rates; the lack of transparency on used finance sees penetration levels often below 20%.
“At a stroke, we can change things; driving up finance penetration with highly competitive rates; embrace FCA requirements; let customers’ control their finance journey and remove some of the negative perceptions of dealer finance promoted in the media. The feedback from the pilot of over 100 dealers could hardly have been more encouraging.”
When used by pilot dealers, MotoNovo said they saw an increase in dealer finance penetration of at least 40%, an increase in the sale of added-value products, increased chassis profitability, increased stock-turn and positive responses to the new level of customer transparency delivered.
Standish concluded: “At a time when we need fresh thinking, the pilot dealers’ responses have been extraordinarily positive.
“The capacity to promote a highly competitive span of rates has been a great marketing tool that is increasing trust, underpinning a new way of working that works for dealer and customer.”
