Ian Dewsnap
considers five promised innovations in motor finance yet to
materialise
I was having a conversation the other day in which someone
asked the very sensible question “whatever happened to the
paperless office?”.
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It made me recall
some of the innovations predicted for our own business over the
years which never quite turned out the way the originators (and
investors) thought they would.
1
By now, (and I write this in the week Tesco Cars retreats from the
internet), we were all supposed to be buying cars online, with
dealers just a thing of the past. The landscape has changed and the
net admittedly does play a huge part in the buying process; but
somewhere in the chain most customers still like to have contact
with potential vehicle purchases and examine what they plan to buy.
The process remains an emotional one for most.
Manufacturers by
and large still have not figured out selling their vehicles and
finance direct to customers. Face to face showroom transactions
remain at the heart of the industry and while online broker
services are growing, the packages presented at point of sale
remain attractive and a lot of us would rather deal with someone we
can see.
2
Dealers have not managed to become the no-haggle, fixed-price
retailers once pioneered in America. I visited an Auto Nation
megastore once there, in its early days – you chose your car on a
computer screen, parked in bay green c147, then got on board a golf
cart to go and look at it. All services had a fixed menu price
(F&I included) and the customer liaison person was nothing like
our definition of a salesman.
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By now, manufacturers were meant to own much of the value chain,
with repair centres all over the place, but I see Kwik-Fit remains
in business despite the best that Ford could do. Dealers remain
more motivated and better at trading and selling, F&I and fleet
business sales than most manufacturers.
4
Remember financing initiatives for graduates, where payments
increased in successive years as their earnings rose? What about
leasing where you effectively rented a vehicle model and could
change up or down in the range during the contract lifetime,
altering your instalment accordingly? That one hardly got off the
ground. But this is not to scoff at product innovation, because
others grew: options became a PCP staple, while Gap insurance
gained a foothold as a slow burner but a growing one.
5
Seeing into the future is tough, particularly in technology – as
the dot com boom proved. Point of sale systems, after peaking as
multi-function selling tools with fancy graphics, are now back to
plain but more effective management tools.
Of the initiatives
we are working on today, some will make the grade and some will
fall by the wayside – that’s evolution. Certainly we can learn a
lot from the fossil record.
Ian Dewsnap is director of UK operations at
BenchMark Consulting International
