Auto and fleet leasing lenders invest in technology as industry digitalises

Colin Tourick

Important new research conducted by Professor Colin Tourick of International Auto Finance Network (IAFN), sponsored by CHP Consulting and Grant Thornton and first released to IAFN members in May 2016 at the IAFN Conference.

Retail auto and fleet finance lenders have customarily been accused of resisting innovation. Accusers point to traditional finance products such as contract hire and hire purchase as being around for decades with lenders only making occasional and half-hearted attempts at creating imaginative and new methods of funding.

However, recent research, reveals that this is changing – and fast. Driven by changes in how customers are seeking to acquire, rent and use their cars – and fuelled by new advances in technology not least being implemented within cars – some 81% of fleet lessors feel that their clients do demand innovation from their suppliers. This represents a 5% increase in those reacting to increase in demand for innovation compared to those asked the same question two years previously (2014: 76%).

IAFN research document 2016The innovations they are being asked for include: smarter IT, more flexible leasing arrangements, cost reduction (without reducing choice), mobility solutions and delivery of services in a more integrated manner.

Similarly, retail auto lenders questioned about their currently most successful element of product innovation – Personal Contract Purchase – enthused about how PCP has become the “product of choice” for the majority of UK consumers and motor finance companies. It is increasingly being seen as part of a general movement away from car ownership to usership coupled with a growing perception that PCP is a low-cost option.

The research closely questioned some 5,000 auto and fleet finance executives in March and April 2016. Auto finance leaders also revealed that their industry is on the verge of a massive revolution in technological change – and also unveiled their preferred lines of IT investment.

The study is a complete and intensive examination of the key issues affecting the retail auto & fleet leasing industries. Amongst a packed 76 pages of research, other topics analyzed include:

  • Salary sacrifice and employee car ownership schemes;
  • How companies fund their vehicles;
  • The rise of mobility solutions;
  • Changes in customers’ buying habits;
  • In depth examination of finance products;
  • Funding & finance regulation;
  • Auto taxation issues;
  • Big Data & car purchase – the issues; and
  • Automotive Technology Investment Trajectory.

How to download a copy of the research report

Copies of The International Auto Finance Network Spring 2016 Research are available free for download.

Complete the form below and click on “order free” to receive your personal copy

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