Auto finance is doing bigger business than ever. But in the drive to convert the world to electric vehicles (EVs), there’s huge potential to go further – by embedding finance as the first stop on the car-buying journey.

In the U.K. almost all new cars – around 92% – are bought on finance, with auto finance debt increasing by £29 billion since 2009.[1] However, despite the environmental imperative to go electric, the proportion of U.K. drivers expecting to purchase an EV in the next five years has dropped, from 17% in 2021 to 15% in 2022.[2]

And in the U.S., separate research has found that only 8% of consumers will choose an EV as their next car.[3]

There are many common reasons for not making the transition to EVs, including: a lack of public charging points; “range anxieties” about battery technology; and worries about electricity costs, the inability to make long journeys and the complexities of the charging process.[4]

Valid as these concerns are, though, there’s also a lot that a technology-driven, finance-first approach to car buying can do to help.

Traditionally, consumers have chosen a car then arranged the finance after as a separate transaction. By not only making finance the first consideration in a purchase, but also embedding credit-decisioning tools directly into the buying experience, at the point of need, you remove friction and uncertainty from the purchasing process.

For many customers, the most obvious advantage of embedding a finance-first approach will be knowing how much they can borrow from the start of the car-buying journey, and how that translates into a monthly payment plan. So, they can immediately choose a vehicle that best suits their credit capacity and their budget.

But the benefits of an embedded auto finance experience don’t stop there, especially when it comes to meeting the new-world demands of running an EV.

For a predictable monthly subscription, a customer could, for example, get a charging point installed at their home, and access an in-car service that plans charge stops into long journeys and checks which charging stations are currently available en route. They could also pay charging costs – and any other expenses associated with running the EV – as part of their monthly payment.

Here, the goal for auto finance providers is to deliver convenience and confidence, and keep life as simple as possible, by wrapping a potentially complex set of services and payments in a single regular transaction.

It’s the same as with a mobile phone. You could always buy or lease your handset from one provider, insure it with another and choose a monthly call and data plan from a third. But ultimately, it’s easier to bundle everything together at one point of sale.

With embedded auto finance, customers know where they are from the start, but can also count on services that go the extra mile. What better way to make EVs the first choice of every car buyer?

[1] AM Online, UK Car Finance Soars to £40bn, November 2, 2022

[2] RAC, More Drivers than Ever Expect to Go Electric Next Time But Many Likely to Delay …, October 14, 2022

[3] Deloitte, 2023 Global Automotive Study, January 2023

[4] RAC, More Drivers than Ever Expect to Go Electric Next Time But Many Likely to Delay …, October 14, 2022