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Brokers urged to embrace car finance space

by Reporter4 minute read
Car dealership

An aggregator has called on brokers to capitalise on the growing demand for broking services in the car financing space. 

Platform Finance, which co-owns car-buying service Fleet Avenue, has experienced a 96 per cent growth over the past 12 months, which it expects to repeat in 2020.

“Over the past three years, we’ve noticed a spike in people doing their car-buying research online – from reviewing specifications, pricing and delivery – and then ordering their cars online,” Damian Mantini, Platform Finance’s director of aggregation and strategic partnerships, said.

“Buying a car is a big decision, and many people prefer to do it from the comfort of their own home. Convenience is king, and Fleet Avenue’s statistics show that around 40 per cent of car buyers don’t even drive the car before they buy it.”

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Mr Mantini noted that brokers are playing an increasingly greater role in the space, with a KPMG Motor Industry Services white paper revealing that more cars are financed by a broker/aggregator than a car dealership.

“The KPMG report also shows that 93 per cent of buyers need to borrow money to buy cars,” he continued.

“Dealerships are struggling to get loans approved through their prime lender because of tighter credit policies, and they are being encouraged to seek alternatives such as brokers and aggregators.”

Mr Mantini encouraged mortgage brokers to capitalize on the uptick in demand for their services and diversify into the car financing space.

“We have noticed a rise in the number of people using brokers to source their cars and arrange finance,” he said.

“And that’s why we established Fleet Avenue. It’s like a virtual dealership – a ‘one-stop shop’ that makes it easy for brokers to provide value-added services for their clients to further build relationships.

He added: “We research, tender, locate and receive discounted pricing from various dealers for the new vehicle.

“Our experienced consultants then negotiate with the selected dealer and offer a concierge service for the client.”

Recent cuts to mortgage rates have also filtered through to the car finance space, with peer-to-peer lender RateSetter recently announcing reductions of up to 85bps.

According to the non-bank lender, the move comes following “a period of extensive consultation with RateSetter’s network of more than 2,000 accredited car loan brokers”.

It said that the new car loan rates help “creditworthy borrowers get on the road for less and provide brokers an important competitive edge against traditional lenders and dealership finance”.

[Related: P2P lender drops car loan rates]

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