MUMBAI: Auto financiers are pushing for innovation in lending, with a shift towards blended financing and partnerships rather than generic EMI products, even as global markets adopt integrated digital credit at the point of sale.While approximately eight out of 10 new cars are financed, car dealers make sales based on on-road prices. Financing is a separate transaction.Speaking at the 5th Finance and Insurance Summit of the Federation of Automobile Dealers (Fada) in Mumbai, Rajan Paintal, CEO, Yes Bank, said there is a need to make car buying seamless.“While the industry offers auto loans as an installment product, we have not yet succeeded in developing a combined product.”
Bental said that today the customer enters with full knowledge of the car and its features, and the multiplicity of lenders delays the deal.In developed markets, lenders and OEM captives routinely offer fully integrated digital credit at the dealer or through online configurators, with instant decisions, e-signature and financing tied to the vehicle order. In contrast, conventional loans still dominate the car financing market in India, with leasing accounting for about 1.5% and subscription about 0.1% of the market.
Bentall urged the industry to go beyond ex-showroom prices and offer plans tailored to each pin code.The industry has achieved significant scale and the gap between rural and urban sales has begun to disappear, said Raul Rebelo, MD & CEO, Mahindra Finance.CS Vigneshwar, president, Fada, said the finance and insurance businesses were the “bearing walls” keeping car dealerships afloat. In wholesale financing, dealers expect more transparent demand-based financing and faster transmission of interest rate cuts, he said. In retail finance, he said there was a need for more robust used car financing solutions and smoother settlement processes.