Author: Tom Stinton
We’re already seeing elements of the connected car come to life. But this exciting development has much, much more to offer – not just to drivers but for car finance providers. Let’s take a closer look.
A few months ago we took a first look at the connected car: what it might look like, the challenges that have previously limited its potential to date and what you could be doing today in preparation for when it really takes off.
So what will the connected car bring to our lives? What use cases can we expect to see? And what benefits will these bring – to both the customer and the auto finance company?
The auto wallet
Over the past decades we’ve seen money move from the cash in your pocket to the debit and credit card and then, more recently, to the digital wallet on our smartphones. Now imagine what life would be like if your car – your connected car – also became a wallet.
Let’s begin by picturing what that would look like. It would mostly likely take the form of a ‘PayPal’ type app embedded into your car that you would be able to access through your car’s infotainment system. That app could link in to your money where, like PayPal, it could make use of a direct debit to access your current account – with your say so of course. You could also store an amount of money within it, in the same way you can put money on a prepay card or into PayPal.
The vehicle owner – or user if they are a different person – could use that wallet to pay for ad-hoc car related things such as tolls, parking fees, fuel, a car wash or a ferry trip. The car might even treat its passengers to a drive-thru once in a while. Biometrics – potentially voice or fingerprints – would be ideal for authorising payments.
The auto wallet could also pay for more regular items such as insurance, tax, servicing, MOTs and breakdown cover. And it could also remind you when these payments are due, notify you of when the payments have been made and alerts you about any payments failures.
For the customer, the primary benefits would be convenience and transparency. Not only would making payments be easy, the app would keep track of payments made and could, potentially, provide a dashboard summarising spend.
For an auto finance company providing this digital finance app, benefits would include brand visibility and regular contact with the end customer, along with some insight into the customer’s financial behaviours – if the customer is willing to share this.
Interested in a trade in?
The car finance company providing that vehicle finance software might also gain some insight into the customer’s driving behaviours, along with their needs, likes and dislikes on things automotive. That would then allow the company to become the hub for everything financial (and more) relating to the customer’s car. It could even provide tailored offers and alerts, and offer access to third-party services such as breakdown cover, insurance or servicing.
And this leads us directly to my next use case: equity parity. Those tailored offers could include asking the customer if they would be interested in trading their car in and some suggestions on suitable new cars once the remainder of the car loan has fallen below the value of the customer’s car. Those suggestions for alternative cars based on the insights they have into the customer’s needs, desires and behaviours – both financial and automotive.
A tailored service
All in all, the connected car would allow the car finance provider to get to know their customer better, offer them a more relevant service and keep in touch.The connected car would allow the car finance provider to get to know their customer better Click To Tweet
Imagine the connected car sharing the number of miles a customer has driven, for example. A flexible loan agreement could then inform the customer what the financial implications of any additional mileage might mean and even adjust monthly payments to reflect that mileage, minimising any additional payments due at the end of the loan term.
And one day machine learning might allow the car itself to get to know its owner and their driving needs better too. It could track fuel consumption or spend against mileage and provide a dashboard showing how that is changing over time and some suggestions to improve it. It could automatically notify the auto finance provider when it boards a cross channel ferry or crosses a country border. It could send out reminders when insurance, tax, servicing, MOTs and breakdown cover are due. Or it could simply keep relevant tutorials, guides and maps up to date and make them easily accessible.
Are you thinking about how you could take advantage of the connected car? I’d really like to hear your novel ideas.