Online financier Peoplefirst.com has doubled its auto refinancing business since February 2001.
With a host of banks offering a wide range of online finance products, including auto financing, Peoplefirst.com has differentiated itself by overcoming the traditional, labor intensive process of obtaining a car loan.
Most banks offer online applications for car loans, yet take several days to approve financing, often passing the application on to auto dealers. Peoplefirst.com takes applications online and offers approvals in as soon as fifteen minutes. A package can be sent to the customer within 24 hours.
The site’s customers can also often realize significant cost savings through reduced interest rates. When dealers finance cars, they mark up the interest rate they receive from banks by up to 150 basis points. Peoplefirst.com eliminates the dealer from the financing equation, thus eliminating this extra profit.
It also offers auto refinancing. In an environment of declining interest rates, consumers often think of refinancing home mortgages, but rarely recognize the cost savings from refinancing car loans. Peoplefirst.com has successfully promoted these benefits to its customers, doubling its auto refinancing business in three months.
Peoplefirst.com will soon also offer a range of other services to ease car purchasing. These services include referring customers to dealerships and offering warranties on new and used cars, including private used car sales. This appears to be a winning strategy: financing is merely the tip of the iceberg in a series of issues that concern the car buyer. Offering support throughout the purchasing process can only relieve much of the anxiety associated with such a transaction.
As more people look to manage their finances over the Internet, customers will seek the speed, cost savings, and convenience of online finance. Financial services firms must not miss out on the opportunity to offer online financing, refinancing, and other value added services to their customers throughout the car purchasing process. Peoplefirst.com is a pioneer in this respect and other firms seeking to enter the online finance space should adhere to similar business models.
