Finance ‘gateway’ to boost penetration rates launched

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.”