How vehicle finance companies can win in 2023

The next year is going to be a tough one, with fewer car registrations than ever. Follow our tips to make the most of every customer and drive ahead of the competition.

The automotive sector enjoyed a strangely prosperous period over the pandemic period. But that’s all about to change. The SMMT’s forecast for 2022 has been revised down again due to the cost of living crisis (as well as ongoing supply issues and semiconductor crisis) – pitching the market at 1.6m units in passenger cars and about 350k LCVs. That now cements a volume loss over the three-year period (2020-2022) of almost 2m passenger cars or the equivalent of a full year of registrations lost.

It predicts that the impact of the low market volumes in passenger cars will put intense pressure on aftersales business. Coupled with the consumer behaviour we typically see in recession where vehicle servicing can be considered a deferrable expense, especially at perceived franchised network costs then a relentless focus on retention will be required to keep workshops full and absorption above 50%.

As a result the onus is on vehicle finance deals to boost or replace lost profitability at a time when the industry needs to make the most of every customer. There are two key ways that APLYiD can help every vehicle finance company to do this.

Make the most of every customer

With the market in turmoil and with two million fewer car registrations expected in 2023, competition is going to be fierce for every single customer. The last thing you want is to lose out even one of those customers to poor administration or a clunky, off-putting signup process.

That’s why we need to talk about AML and verification checks.

When it comes to AML checks, the industry standard for pass rates is around 70%. Some of our customers have reported that prior to using APLYiD their pass rates could drop as low as 55%. That’s money lost due to incomplete checks.

APLYiD is different. Our checks use multiple credit bureaus and the latest OCR technology to eliminate manual data entry errors. As a result, our pass rates average out at over 88%. Compared to the market, that’s 18 more customers for every one hundred that sign up to your products and services.

18 extra customers – simply by changing your AML checks provider.

But as well as being the best in the business, our AML checks are not expensive. We offer very competitive rates and a dedicated support team that can help guide your customers through the process if they get stuck. That boosts your customer service experience too. And that’s important, because we know customer service has become the most important lending differentiator. Indeed, customers are willing to pay a price premium of up to 18% for certain services just to receive a great customer experience.

So we help more customers to pass their AML checks. But what about hose who abandon the loan application halfway through?

Keep customers engaged

In a recent webinar Peter Wannemacher, Senior Analyst at Forrester, says abandon rates for online banking applications are at an all-time high of 97.5%. This is a huge, wasted opportunity considering that customers who attempt to complete an application are expressing a genuine interest in your products and services. And while we know car finance loans are (somewhat) less arduous than signing up for an online banking service, our vehicle finance clients tell us that abandonment rates are one of their biggest headaches, pushing up cost per acquisition and wasting time, energy and resources.

To solve this APLYiD recommends biometric id verification. Our bespoke, best-in-class web application is accessed by clients by a text message sent by you. They take a photograph of one piece of ID and a selfie, and the biometric scan automatically verifies your customer in less than 90 seconds. We can even make the portal bespoke for your company brand to reinforce that customer journey experience. It’s simple, fast and has been proven to cut abandonment rates by over 60%.

Eliminate fraud

Another huge timewaster is the amount of time, money and stock lost to vehicle fraud. The volume of reported fraud has increased by 41% in the UK in the past 12 months, according to the National Vehicle Crime Intelligence Service which was launched 11 years ago with sponsorship from the Finance and Leasing Association. According to market predictions, it stands for £1 billion in losses for the car industry in Europe. Fraud has a big impact on car leasing and vehicle rental companies too.

When APLYiD was approached by Go! Rentals, the company was losing a car every four days to identity fraud. By implementing our biometric verification checks, the car company has not lost a single car in over 15 months. It has also improved staff safety and allowed the company to develop a smoother, more user-friendly customer experience. James Dalglish, COO of Go! Rentals, says:

“We’ve been able to reduce theft of our vehicles by over 95% in a 12 month period by implementing the APLYiD solution. The savings in both money and time has been enormous.”

By implementing APLYiD’s technology to your customer experience, you can vastly improve your pass rates, cut abandonment rates, and eliminate fraud. In 2023, when customers are going to be much harder to come by, our software could be the difference between surviving and thriving during the recession.  

To find out more about our biometric onboarding and verification software, you can get in touch here.

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