New figures released by the motor retail technology market leader show that since the beginning of 2021, the number of motor finance applications made through its platform that include at least one add-on product have risen by 65%.
Similarly, the average value of these products included with each paid out motor finance application have increased by 66%, from £384 to £638, while the percentage of dealers among the company’s user base submitting VAPs with deals has increased from 14% to 19%.
Darren Sinclair, CCO at iVendi, said: “For dealers that take the time to incorporate them into their customer journey, VAPs are a potentially significant source of profitability for dealers, while helping to provide customers with products that have genuine value.
“These figures show that dealers using our technology are increasingly successfully integrating add on products into both online and showroom processes, with notable increases in both penetration and value of sales over the last couple of years.
“For example, the number of finance quotes generated that included warranties sold in 2021 increased by 37% last year. This is a substantial and arguably important source of revenue at a point in time when dealer margins are held to be under an increasing amount of pressure.
“Of course, dealers with their own workshops can build on this initial sale by capturing any repairs that may be necessary under the warranty, adding to the potential for profit in the longer-term.”
A key part of this increase, Darren said, had been prompted by iVendi’s Digital Deal technology, which allows a dealer to construct a proposition for a customer based around a specific vehicle, including finance and VAPs, in a matter of moments.
“Digital Deals were introduced in 2020 as part of the Transact product we initially offered free to dealers to help them through the pandemic. Their key benefit is that they allow dealers to offer a tailored deal to a customer through any digital channel, whether that potential buyer is online, on the phone, or standing in the showroom.
“That customer can then look at the deal being proposed at their leisure, making changes to arrive at the solution that suits their needs. Not only does this self-serve approach very much fit in with Consumer Duty, but it helps to promote the advantages of VAPs, with the customer able to look at the products in detail in their own time.
“It’s a very effective way of meeting a customer requirement and is an important driver of the increases in add-on sales that we are seeing at iVendi.”