Vehicle data check company HPI has launched a web-based tool for dealers, which aims to boost their rates of finance penetration.
HPI Finance Gateway is an online system which allows dealers to find new and used car finance for their customers from a panel of funders – from prime to subprime.
The finance houses Fortis, Moneyway, Santander and Southern Finance are signed up the system, with HPI in talks with other providers including Black Horse, British Credit Trust, Carlyle Finance and Duncton.
HPI Finance Gateway is currently in a “test and learn” stage with 12 dealers, said HPI automotive director Daniel Burgess, with a nationwide roll-out to HPI’s database and any other interested parties scheduled for early autumn.
When a dealer enters a customer’s details into HPI Finance Gateway’s online portal, the customer is initially screened via a public search by HPI’s credit reference partner Callcredit, with the HP or PCP proposition then ‘streamed’ to an appropriate funder, resulting in an “instant online proposal”, HPI said.
Higher acceptance rates
The result is higher acceptance rates for customers, a steady volume of suitable propositions for finance providers, and higher commissions with no claw-backs for dealers – a “triple win”,
“Dealers like the system, as they can earn commission without having to multi-prop customers; customers are satisfied because the process is quick and easy, and they get a good quote; and finance houses like it because they get a reliable stream of appropriate propositions,” Burgess said.
Dealers which already use HPI for vehicle checks can access HPI Finance Gateway free of charge, while the fee for non-customers is being waived during the trial period.
The software is designed to accommodate both FSA regulated and non-regulated dealers, with independents and small chains targeted in particular.
The system could be seen as a threat to finance brokers, who have traditionally acted as intermediaries between dealers and finance houses, streaming customers to the appropriate funder.
However, Burgess said that HPI’s aim with Finance Gateway is to win back market share for point-of-sale (PoS) finance through conversion of customers who would otherwise have gone to direct loan providers, in dealerships where finance has not previously been high on the agenda.
“We want to complement, not supplant, the offering from finance brokers. A lot of dealerships are operating without a business manager, due to headcount reductions, and the focus on PoS finance has suffered as a result,” Burgess added.
“With HPI Finance Gateway, we aim to help dealers sell cars with finance in a very user-friendly way, as part of our long-term investment in the dealer market.”
HPI provides participating dealers with leaflets to distribute to customers, explaining the benefits of PoS finance. All customers approved via the system get 7-day ‘Driveaway’ insurance, and 12-month MoT insurance, as well as six months’ free HPI checks for every car proposed.
Dealers will also be notified when a customer’s finance agreement is coming to an end via HPI’s Finance Watch product, allowing them to contact customers with a view to winning repeat business.
Participating dealers are also encouraged to sign up to the Finance & Leasing Association’s Specialist Automotive Finance (SAF) scheme.
“Because our model is based on volume, we are only paid a single small flat fee by the finance company for every finance deal written,” Burgess said.
“This therefore allows the dealers to take all the commission out of the deal, effectively supporting them develop a profitable and sustainable business, built on customer satisfaction, which is crucial in the current market.”