{"id":22759,"date":"2021-04-22T08:17:00","date_gmt":"2021-04-22T08:17:00","guid":{"rendered":"https:\/\/www.experfy.com\/blog\/lending-platforms-automotive-finance\/"},"modified":"2023-08-24T13:29:09","modified_gmt":"2023-08-24T13:29:09","slug":"lending-platforms-automotive-finance","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/fintech\/lending-platforms-automotive-finance\/","title":{"rendered":"Lending Platforms In Automotive Finance"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

General Motors Corporation officially originated the first-ever car loan in 1919. Since then, leasing<\/a> has become an essential part of the automotive industry in regions like North America, Western Europe, and Japan. By the beginning of the 21st century, markets in China and Eastern Europe adopted automotive finance as part of their financial strategy as well.<\/p>\n

According to Experian<\/a>, modern automotive finance is growing exponentially. Americans alone owe more than $ 1,18 trillion in auto loans. In 2019, the total volume of car loan originations climbed to a record of $ 584 billion, while automotive assets (i.e. passenger cars and commercial vehicles) accounted for \u20ac 267,8 in 2018.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"Lending\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

New Approaches in Auto Loans Business<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

The WEF Global Future Council Financial Monetary Systems report 2018 claims that \u201cdigital transformation in the financial sector<\/em><\/a> is well underway and moving fast. With the right policy choices, we can turn these technological advances to the benefit of the whole society. To build flourishing ecosystems, it calls for cooperation between small and large, old and new players<\/em>.\u201d An AI-powered lending platform could bring such cooperation to an unprecedented level. In this scenario, banks will create new products and distribute them according to the growing demand from customers worldwide.<\/p>\n

For example, the domain of modern automotive finance is projected to see a transfer from a classic \u201cbank (OEM) \u2014 client\u201d approach to a new \u201cbank (OEM) (classical financial institution) \u2014 P2P \u2014 the client\u201d one. The model takes root in the wave of digitization that reduces both transaction and information costs while connecting clients with businesses. What\u2019s more, this technological trend opened the market to players who couldn\u2019t previously enter this sector due to high entrance costs.<\/p>\n

So what\u2019s the deal? With the help of automation, a variety of processes are no longer processed manually leaving any place for human error. In monetary terms, the use of automated credit scoring results in reduced salary expenditures and operational costs such as the rent of big office space.<\/p>\n

On the other side of the fence, clients gain access to credit resources online and they don\u2019t have to spend a lot of time on the search. Hannah Keshishian, an automotive analyst at Mintel, explains that \u201cconsumers currently view the car purchasing process as a necessary evil they must be subjected to in order to get a vehicle. They tolerate the current process because they feel they have no other options in terms of where to purchase from; however, as younger generations grow into their purchasing power, they might look to startups and other disruptors that will give them the experience they seek<\/em>.\u201d<\/p>\n

According to the HES Fintech<\/a> survey, $ 250,000 \u2014 300,000 are needed to start a lending business based on a P2P platform. This figure includes the development of the lending platform itself and variable costs.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t

Business Opportunities That the P2P Approach Offers to Lessees and Lessors<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

According to statistics, SMEs worldwide usually face lack of resources to teach staff and develop business processes. Besides, many of them still suffer from outdated technologies with slow processes.<\/p>\n

Lending platform solutions can solve any of the problems mentioned above:<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t