Car ownership and financing are ripe for innovation over the next 25 years, with most changes leading to more options for consumers and decisions for dealers.
“Futurismo,” the new Automotive News podcast, dissected the future of car ownership and vehicle financing in Episode 4.
Here are a couple of the ways experts say the auto finance industry could change:
- In some markets, fleet companies could own and finance cars and offer them to customers on a subscriptionlike basis. To establish a place in the new market, some dealerships may become mobility management providers, competing with fleet operators and ride-sharing and rental-car companies.
- Experts also have visions on how customers will pay for cars in the future. One said he sees ride-hailing drivers using the earnings they make from driving to pay for the car. Drivers for ride-hailing companies often have lower credit scores than the average buyer and some don’t qualify for loans. In this case, though, they would because lenders would know their vehicle payments are coming from their paychecks.
So where does that leave dealerships? Some will likely ride out the change, but others may be left out.
Some sources I interviewed for the podcast said dealerships could benefit from the sharing economy because, in the aggregate, more miles driven, even through ride-hailing companies, would result in an overall increase in service business. But with fleet companies or other large corporations in the mix, other experts doubt that dealerships will thrive as service hubs. After all, what would stop fleet companies from opening service drives?