Auto financing goes online for tech savvy car buyers

SINGAPORE – Online auto dealer Carro will invest S$17 million into establishing an auto financing company to complement its transactions. The home-grown car marketplace transacted more than S$50 million worth of used cars through its online platform last year, said Mr Aaron Tan, CEO of Carro.

“Unlike other online car dealers, Carro doesn’t own any of the cars we sell, nor does it make any advertising revenues from the vehicles listed on our website,” Mr Tan told TODAY in an exclusive interview. Instead, the company offers an end-to-end service, including transfers, payments, loans, insurance, tests and inspection services.

After a year and a half in the business, the company will be launching its auto financing arm, Genie Financial Services, a hire purchase provider that offers speedy auto loan approvals and artificial intelligence-based chat-bots to customers.

Genie Financial Services will be helmed by Ms Helen Neo, who has over 30 years’ experience in the auto financing industry. “Helen brings with her in-depth knowledge of the space which we would have otherwise taken the Carro team years to acquire. We are confident that with her addition, it will bring the company to greater heights,” said Mr Stefan Jung, managing partner of Venturra, a stakeholder of Carro.

Everything from credit underwriting to customer service will be done differently in Genie, claimed Mr Tan. Using algorithms, Genie can quickly and accurately reprice and compute a loan to suit the risk profile of the individual. According to Mr Tan, the service will be the first of its kind in the local auto industry.

The chat-bot service will offer consumers round-the-clock support to get information about auto financing or refinancing packages provided by Genie and other banks.

“We want to do our part in making auto financing more efficient and accessible”, said Tan. “Unlike other major automotive markets such as China and the United States, a larger proportion of consumers tend to take financing in Southeast Asia”. This makes the automotive financing market in Southeast Asia more attractive than its larger counterparts, he added.

Initially, the company started out with the target of reaching out to consumers typically between the ages of 25 and 35 years, who tend to be more tech savvy and comfortable with the online platform, said Mr Tan. However, increasingly, the firm’s customer base has expanded beyond the younger age group.

“It’s all about building trust, there are no short cuts,” he said. "If you provide a good service, people will keep coming back and pass the word around. As Carro’s business picked up, we wanted to provide a one-stop, speedy, hassle-free solution for our customers," he added.

The online car marketplace segment is getting more crowded. Just last month, Carousell Motors launched its one-stop mobile classifieds marketplace for cars.

The automotive industry has become very transparent and gives the power back to the consumers, said Mr Sanjay Shivkumar, head of Carousell Motors. Car buying consumers now know the market prices of a car and can do market research at the comfort of their own home before heading down to the showroom for the last mile of the purchase, he added.

“Going digital is now the new normal for most goods and services businesses, and going mobile is definitely the way of the future,” he said. “Consumers are embracing technology at a much faster pace and with time, businesses whether in the automotive industry or not, have to catch up or they risk being disrupted.”