Pre-approval boosts motor finance uptake to 56%, iVendi data shows

Motor finance pre-approval is driving higher uptake among vehicle buyers, with new data from iVendi showing penetration increasing from 47% to 56% when the option is available.

The findings are based on data from iVendi’s Finance Navigator platform, which introduced pre-approval 12 months ago and allows consumers to identify finance options before making a formal application.

Where information entered by a dealer or customer is accurate, participating lenders can automatically offer finance on the terms quoted in the initial search.

“Pre-approval means if details entered by the dealer or consumer in our online motor finance comparison search are accurate, a deal will automatically be offered by some lenders using our platform on the terms quoted, rather than having to make a formal application to confirm the proposal.

“What this means for the consumer is effectively, instant motor finance. By clicking on the pre-approved option, they can access funding to buy a vehicle almost immediately.”

After 12 months of data, iVendi said uptake of pre-approved finance options was nine percentage points higher than non-pre-approved alternatives.

Tew said: “This technology has now been available for a year, which means we can compile meaningful data showing there is a definite preference among vehicle buyers for pre-approval.

“The overall increase we are seeing of 9% over non-approved choices is a significant difference in terms of motor finance penetration.”

According to iVendi, pre-approval can also reduce the likelihood of customers subsequently having their finance application rejected.

Tew added: “As long as the details entered are correct, the rejection rate is negligible, which makes the motor finance process much more efficient for consumers, lenders and dealers. It’s an innovation that delivers faster, easier motor finance.”

Finance Navigator enables motor retailers and consumers to search finance products from lenders on the platform either online or in the showroom.

Results are returned in under 10 seconds and provide information including monthly payments, the specific finance rate, likelihood of approval and whether pre-approval is available. The platform uses real-time lender policy and credit scorecard information to generate the results.

Lenders currently using the technology to offer pre-approved motor finance include Admiral, Ayan, Tandem and Zopa.

Tew said: “These finance providers and their dealers consistently report a significant uplift in the sales they are achieving by offering pre-approval.”