“Younger age groups are starting to actively participate in the acquisition of assets, expectations on financial institutions and their offerings are changing rapidly. I expect the motoring industry, including vehicle finance, to evolve more in the next five years than it has in the past four decades,” says Wesbank CEO Ghana Msibi.
Ghana refers to Baby Boomers and Generation X, as saving age groups and outright owners of assets. “Generation Y and Z groups prefer paying for usage rather than risking ownership.”
How does this translate to vehicle finance?
The finance industry will have to adapt by offering greater flexibility and more “pay-for-usage” structured deals.
“In a way, this concept is already in place with various Guaranteed Future Value programmes, but an evolution and improvement in pay-for-use arrangements is on the horizon.”
Shared mobility and shared responsibility – in terms of payment for finance, is another option. Documentation should be streamlined, simplified and become much less. Response time to customer enquiries and subsequent communications should be quickened. “Pre-approvals should streamlined with maximum purchase prices already in hand before setting foot on a dealer floor.”
New business models are required. Ghana says, “Our intent is to cater to new demands and significant investment has been put in place to develop new business methods.”
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