Online broker putting prime foot forward

Jonathan Minter speaks to Louis Rix from Carfinance 247 about a rise in prime customers in what has been a very good year for the broker.

How has the past year been?

Phenomenal in a word. We’ve just announced a record year and we’re rapidly on track to become the number one online car finance specialist.
Our success has been down to a number of factors including a definitive shift in consumer behaviour, our significant investment in technology, our passionate workforce, and the development of our brand.

We now employ 165 people here in Manchester and have just acquired a second 5,500 square foot office within our building for further growth. We were just 55 people this time last year.

Our unique offer is also enabling us to attract new lenders. We’ve added nine new lenders this year alone, going from five to 14, which means we can offer increasingly specialised products, as well as offer deals not available elsewhere online.

You recently mentioned that you’re seeing a lot more prime customers, whereas you used to be mostly subprime. How has this developed, and do you think this is a long-term shift?

Due to significant investment in our brand, we’ve experienced not only growth in the volume of applications but interestingly we have seen a big shift in our customer profile attracting a better quality of customer, whereas in the past a large percentage was non-status. Our prime business now represents 52% of all enquiries, this time last year it was 37%.

I believe the main reason for this is that there’s a greater acceptance to shop online per se, across all markets, and in particular more confidence in shopping for services and products like ours via the internet.

In fact, the savvy consumer now regards online specialists like us as the best place to come for the best deal.

So this is all down to consumer confidence and a shift in consumer behaviour. We’ve been able to capitalise on this and ensure the experience our customers receive meets their expectations, which has resulted in high conversion rates across all consumer demographics.

Technology is also helping this trend. We know that more and more people are using mobile devices to access online services such as ours (54% in 2015 versus 35% in 2013), and because we’ve catered for all devices with mobile-first functionality they’re getting a great experience. It’s broadened how customers can access motor finance quickly and easily.

I believe this is a permanent shift and will gradually continue. We’re still seeing monthly increases to a more affluent customer base.
It also goes hand-in-hand with gradual awareness building that sourcing finance online before buying a used car is a viable alternative to dealership finance.

The trend is also mirroring consumer spending trends and the state of the economy as a whole.

I don’t think the non-status lenders should be concerned. The market’s big enough for everyone and there will always be people who fall into the non-status category. Even as the economy picks up, people can often find themselves in hard times and unfortunate circumstances – the demand will remain.

What other trends have you seen emerge in the past year?

The biggest trends we’ve seen tend to be the aforementioned ones that have influenced our success. So a general increase in people shopping online for motor finance, a large shift in people visiting sites from mobile devices, which is impacting positively on our conversion rates, and changes within our customer base.

Personally we’re seeing more brand awareness where consumers have a clear knowledge of our brand, which wasn’t really the case two or three years ago. We’ve seen a 262% increase in our online brand demand year-on-year.

There are also more lenders in the wider market than ever before, and more people wanting to lend in the car finance sector. This is upping competition within the space and broadening options available to the end-customer.

Towards the end of 2014 there was talk of possible consolidation in the broker space. Have you seen any evidence of this occurring yet?

I’ve not seen any evidence of it. I think the established players are experiencing growth and smaller brokers seem to be thriving too.

In the online space we go direct to the consumer and offer multiple options to best suit the customer’s personal circumstances and credit history. Technology allows us to work with all of our lenders extremely efficiently – the choice and speed at which we can operate is changing how people think of obtaining car finance and is causing a shift in the industry as a whole.

Every broker I speak to says similar things about having a rapid turnaround, good service/acceptance levels and a broad spectrum of lenders they understand. How do you stand out in such a crowded field?

While we’re not a traditional broker, as we go direct to the consumer to generate our business, there’s plenty that sets us apart from the rest.
Turnaround speed, good acceptance levels and service are most definitely factors that are fuelling our growth.

However, the biggest point of difference is that we get hundreds of thousands of direct customer applications a year, and that’s growing, which gives us an enormous edge over the traditional broker.

The volume of business means we’ve also got something to give back to the dealer network in terms of car sales, and that lenders are keen to work with us.

Our high visibility in search engines and above the line marketing is helping us to generate awareness, but I believe another important point of difference is the experience that customers receive, which is fuelling word of mouth recommendation and helping to build recognition of our brand. A recent Google survey showed 18% of those questioned had heard of Carfinance 247 and this’s growing monthly according to the number of people coming to our website by actively searching for our brand name.

We currently market the brand heavily in the UK above the line, but we’re looking to increase our marketing activity significantly over the coming months.

Our brand name undoubtedly helps us be memorable, but at the end of the day it’s our technology, passionate workforce, customer service and brand development that helps us stand out in a crowded field.