Auto finance captives have the advantage in developing servitized auto finance. But are they using it?

Auto finance captives and their OEMS are grappling with a range of challenges which are stretching their development resources to the limit and are having the effect of putting the brakes on development of servitized auto finance.

If they allow investment in connected cars, electrification and autonomy to divert their attention away from servitized auto finance then they risk missing out on income streams projected to grow to nearly half of finance providers total revenue by 2030.

This is one finding from a new research report Gearing up for servitization in auto finance that is due to be released by Genpact, a global professional services firm, at the International Asset Finance Network on December 12th, 2019 in London.

Captives are in a better position than fintech mobility providers to add services alongside the exclusive use of a car at the point of purchase, a model which currently seems much more likely than a total mobility solution which offers mobility as an alternative to the exclusive use of a car. The car creates an opportunity to sell services and gain the scale that Fintechs currently lack.

“So, if you’re buying an electric car, but want access to a petrol car for longer distances, then it makes great sense to be offered a daily rental element bundled into your purchase. You might even want the opportunity to simply share your BEV and get income from it while you are away.” said David Betteley, former global head of financial services for Jaguar Land Rover.

Captives are also able to use data from connected cars to identify new finance products and services. Connected car data enables the development of advanced services like pay-per-mile finance and insurance and preventative maintenance.

Captives will use their special relationship with the OEM to maximize utilization of each vehicle, selecting the right cars for cars-by-subscription, daily rentals and other car sharing services. As utilization replaces depreciation as a key focus, OEMS seem likely to seek to control more of each car’s economic life, putting the squeeze on the used car market.

To order a copy of the findings complete the form below and we will email the report to you on December 12th when it is released at the IAFN conference in London.

A full discussion of the report’s findings will take place at the event, including presentations from Bob Beatty, EVP of Customer Experience at GM Financial, US, Mike Belcher, Head of New Business at LeasePlan, UK and Marcella Merli, Head of Sales and Marketing for FCA Bank.

Pre-order your copy of Gearing up for servitization in auto finance

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