Online finance applications up 53% since pre-lockdown

Online motor finance applications have risen by 53% since the period before the Coronavirus lockdown started, according to iVendi.

The company, which analysed transactions made through its platform since the beginning of March through to the end of June, said the data highlights how quickly dealers across the UK have switched their business models to digital-first as they emerge from lockdown.

“Clearly, the retail motor sector has undertaken an heroic and successful scramble to move from their old model to the new norm of online-with-reserve-and-collect in a matter of weeks. These figures show the extent of that change,” explained James Tew, iVendi CEO (pictured).

“We believe that around one in four car, van and motorcycle buyers are now applying for finance online, which shows the speed of digitisation. Essentially, these customers have entirely chosen and financed their vehicle online. It’s a major shift.”

SMMT data showed 145,377 new cars were registered in June, the result was 34.9% down on June 2019's market and puts the new car market almost 616,000 units YTD behind the same period in 2019.

Tew believes the coronavirus crisis has pushed forward the digitisation of the motor industry by five years.

Research by Auto Trader found that although consumers can now visit most retailers, 15% are still wary about doing so and as many as 80% are open to completing the purchase online or over the phone and only visiting the retailer to pick up their car.

Tew said: “Certainly, we are seeing the creation of a large group of consumers who are becoming habitualised to the idea of buying a car entirely online in a manner that they wouldn’t previously have considered.

“Our view is that, once a vaccine or other advance is implemented, there will be some people who want to go back to buying a car in the showroom. However, for others, the change to thinking of car buying as an online activity will be permanent.”