Automotive payment provider Auto Service Finance (ASF) has secured new investment worth more than £14 million as buy now pay later finance deals become more popular in the automotive sector.

The company provides car dealerships in the UK with an interest free payment solution for customers, when servicing their vehicles.

Dealers have used the loan platform as a buy now pay later (BNPL) option to sell £50 million worth of service work, since ASF’s launch in 2015.

James Jackson, co-founder and CEO of ASF, said: “Dealerships are going through a particularly difficult time at the moment amid the ongoing impact of the Coronavirus and while this will lead to an unavoidable short term slowdown in aftersales activity many have already recognised the longer term importance of adopting interest-free payment methods within their service departments. This is especially important when it comes to selling work that they would have otherwise missed out on.

“In the short term we’re committed to helping provide dealers that are still offering aftersales support with the ability to offer their customers flexible payment methods, something that will be beneficial to both vehicle owners and dealerships alike in the challenging times ahead. This has included developing a fund to help vulnerable customers by discounting their final repayment bills during the ongoing pandemic. Beyond this, we aim to increase both our footprint and the utilisation of our platform across the UK.”

The business has secured £850,000 through equity given to private investors, taking its total investment to £4 million since its launch, as well as a further £13.3 million debt facility. The facility was provided by London based Naviter Capital, which is also one of the equity investors.

Auto Service Finance is now used by more than 2,000 dealership sites in the UK, including sites belonging to brands such as Jaguar Land Rover, Peugeot Citroën, Ford and Vauxhall, and has also started working with Volkswagen Group brands across the country. Dealerships typically pay a percentage of the work sold using ASF to the company.

The company intends to double its tech team following the investment as it prepares for expansion into European markets in the months ahead.

Jackson added: “The technology behind our platform is at the heart of our commitment to providing ethical payment options to customers and a reliable and robust solution to dealerships. This means more investment in the risk modelling our platform includes, as well as greater integration with other areas of technology used in the automotive service sector.”