MotoNovo Finance has launched its new MotoRate finance pricing product, which aims to significantly improve car finance penetration for dealers.
A pilot of the product conducted by a small number of dealers saw an increase in finance penetration of at least 40%, and an increase in the sale of added-value products. Dealers also reported increased chassis profitability and greater stock-turn.
MotoRate is based on a pricing approach where the interest rate is defined by the customer’s circumstances, not the dealer as sought by Financial Conduct Authority (FCA) in their review of the motor finance sector. It also enables dealers to provide lower headline Representative APRs.
Mark Standish, chief executive of MotoNovo, 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.”
Last week, MotoNovo announced it will be providing additional support to its dealers as an accredited ‘Introducer’ for the Aldermore Coronavirus Business Interruption Loan Scheme (CBILS).
By doing so, MotoNovo hopes to provide a new funding avenue to more than 2,000 dealers and 17,000 corporate customers that the business estimates are facing short to mid-term cash flow challenges.
“Dealers and their corporate customers are emerging into a new trading environment that has and will continue to see significant structural change,” said Luke Curtis, MotoNovo’s head of motor – commercial finance. “Many will be seeking more routes to access capital, having seen their cashflow interrupted and will be looking to invest in the development of their business models. As an accredited CBILS introducer of our parent Aldermore Bank we can help now.”