The emerging Cars-as-a-Service trend highlights the importance of finance software flexibility
Author: Justina Rakauskienė
For several years already, multiple industries had to adapt to market changes from selling standalone products to providing full customer-oriented services. The vehicle leasing industry is no exception. People are not longer tend to commit to owning a car, but they still need to go places and receive a full-service package with that. And it is as accurate as it is straightforward. That is why the car leasing industry is moving from traditional asset-oriented, long-term loans, and commitments towards flexible, subscription-oriented mobility solutions with full-service operating leases.
CaaS – hype or hope?
Cars-as-a-Service (CaaS) business model is when a customer pays for a car subscription but not for owning a car in the long term. This kind of business model may be tricky for dealers and financiers. Still, as it is fast and straightforward for customers, it is spreading so rapidly and creating new opportunities for fleet management solution providers.
It’s hard to imagine that CaaS won’t continue to grow in the short term, and it may even become the most popular method of using cars in the future. MarketsandMarkets analysis suggests that global profit from car sales will fall marginally to around 134 billion dollars over the next decade, while the whole Mobility-as-a service (Maas) market could generate 242 billion of dollars of annual profits over the same period.
Leasing software to enable CaaS
This ascent of car subscription ruins the existing financing and leasing model for car dealers, bringing full-service operating leases up to the front. Dealers now need to be able to manage more than ever separate leasing agreements. This is when all heads turn to the main element to make all of this successful and profitable: leasing software.
Is your current software flexible enough to support new leasing products of CaaS? What is your time-to-market with new products? Many different leasing products and possibilities characterize the CaaS business model. That‘s why it requires reliable and, most importantly, flexible software for dealers floor planning, that manages portfolios and payments in different markets, with regulatory and currency differences, as well as providing a user-friendly interface. Leasing software needs to be flexible, adaptable, and quick so that it would be easy to offer many different leasing agreements, and documents would be proceeded as soon as possible to serve any customer.
Having innovative leasing software, automotive industry players can use different workflows that helps to handle higher transaction volumes. Also, the business intelligence tools included in the latest auto finance software platforms add to the experience, giving automakers and sellers the ability to evaluate financial and operational risk through internal data collection and analysis.
The reality is, CaaS rely on vehicle availability and therefore requires the creation and management of leasing and finance agreements that, while slightly different, still resemble traditional asset leasing and finance contracts. It means that car manufacturers and dealerships that have the right tools will successfully catch up with the CaaS trend. Be prepared for it and supplement your business with suitable leasing software now.
Read more about SOFT4Leasing software, that supports new vehicle leasing trends: http://soft4leasing.com/floorplan-funding-software/