8 Pointers Highlighting The Financial Change In Automotive Industry

8 Pointers Highlighting The Financial Change In Automotive Industry

From its inception, the automotive industry has seen growth and change. These changes have also impacted the auto-finance industry. Automobile financiers and banks have to change their methods of financing methods to adapt to the changes in the automotive industry and the needs and tastes of consumers.

2019 has also seen changes in the automotive industry and consumer preferences and to adapt to these changes financiers need to adopt new methods of financing.



Automobile financing will soon be driven by blockchain technology. Blockchain technology will help turn the vehicle into a wallet and the wallet will support insurance and financing. Blockchain technology will make fraud detection easy. Blocks will store all the financing information through unique codes and help make financing easy and transparent.

Mobility as a Service

With various finance offers on automobiles, mobility as a service has become the newest trend. Most consumers do not want to own a car but prefer to use shared services or hired services. Automobile financiers may need to lend to startup companies that offer mobility as a service for customers. Customers wanting to own individual cars may become fewer.

New Sales Channels

Lending may become easier and better coordinated with advances in information technology this year. New software can help predict customer behavior precisely. Technology will help lenders accurately predict the types of vehicles that customers are more likely to purchase.

New Ownership Trends

Experts believe that the old method of one owner, one vehicle and one payment is all set to change. Customers today are looking to pay a flat fee subscription and get an automobile of their choice. The trend today is also towards shared ownership where many people own the same automobile. The reason for these new trends is that as the technology used in automobiles increases the cost of maintenance and manufacturing also increases. Flat fee subscriptions and shared ownership could make using automobiles affordable.


Automobile dealers will have to change the way they do business. They will now have to sell cars to those who run mobility as a service establishment or to a group of customers rather than a single customer. The business models of automobile dealership will need to change to usher in the new requirements of customers.

Interest Rates

The interest rates in getting a loan to buy a car are rising by the day. Automobile financiers will have to tighten their lending terms and lend only to consumers with good credit scores. Customers with poor credit scores will need to purchase automobiles from used car dealers. This will also mean that fewer customers will need a loan for a new car.


Lenders will soon stop offering long term loans because of the likelihood of greater losses on loans. This is because most of the early payments on the loan go towards the principal and not towards interest. Many customers prefer to lease new cars and these cars are placed in used car lots after the lease expires.


The rates of automobile insurance are likely to decrease because of the advanced safety technology in new automobiles. Since consumers tend to choose flat fee subscriptions, sharing options or leasing options, insurance costs will decrease. The eligibility criteria to get automobile insurance will also change according to the new-age requirements of customers. Blockchain technology will also impact insurance in the same manner as automobile financing.

As technology advances, prices rise and consumer preferences change, a transformation in the way automobile financing is performed and insurance premiums are charged for new automobiles is inevitable.