Vancouver, BC – The emergence of FinTech in the auto sales industry is one of the largest contributing factors behind Canada’s record breaking pace in vehicle purchases. An all-time annual high was set in 2015 with 1,898,484 new vehicles sold, marking the third year in a row that Canada has set such a mark.
Low interest rates and a large number of older vehicles needing replacement provided the conditions, but companies like Canada Drives, which matches consumers with financing options for their next vehicle purchase, were the catalyst for more consumers entering the marketplace. In 2015, the company facilitated auto finance on a mass scale through the use of technology, working with over 400,000 Canadians. This represented over $7.2 billion in auto loan applications that has resulted in just over $1 billion in funded loans.
Canadians are just beginning to understand that they have more options when it comes to selecting a vehicle, says Canada Drives founder Cody Green. “Financing is an integral part of the vehicle buying process,” explains Green. “The ability for potential buyers to secure their payment options via a FinTech company like Canada Drives has led to hundreds of thousands of additional Canadian vehicle owners.”
The trend seems to be continuing in early 2016, with the highest sales volume for March in Canadian history coming after February’s record breaking sales figures. According to Ernst & Young, Canada has plenty of room to grow in terms of FinTech adoption, with only 8.2 per cent of digitally active consumers using at least two FinTech products within the final six months of 2015. While this puts Canada behind countries like the US, UK and Australia, the Ernst & Young FinTech Adoption Index projects that this rate could triple by the end of 2016.
Coupled with the fact that there are currently 10 million vehicles on the road in Canada that are at least 10-years old, the likelihood of even more Canadians being drawn to online lending for their next vehicle is very high.
The Ernst & Young research also shows that it is low awareness rather than a lack of trust behind Canada lagging in comparison to other G7 countries. Canada Drives sees this as a huge opportunity to educate Canadians on the options for online financing that now exist.
As sales volumes increase, Canadian dealerships are becoming more technologically inclined, and Canada Drives is now offering a range of technology infrastructure and services to support this development, according to Green.
“Canada Drives understands the new breed of customers that dealerships are receiving, and we are working with over 300 dealer partners to better prepare them to take advantage of technology,” adds Green. “Allowing applicants to add convenience and certainty to their vehicle purchase requires a new approach from dealers, and we are here to facilitate that transition.”