German startup Auto1 GmbH is entering a partnership with Deutsche bank and Allianz SE to ease car financing for customers using fintech. The three partners together own more than 50 percent in a new company called Auto1 Fintech, that will offer refinancing loans and insurance products to car dealerships.
Auto1 is an online exchange for used cars. It buys them and sells them to dealerships that then offer refinancing for them. However, by using the blockchain they will be able to instantly refinance their purchases online instead of using a paper-based process that can tie up their equity for two to three weeks.
The partners hope this will encourage more car purchases and compared it to the way in which the Paypal instant purchase tool made Ebay sales rise in volume.
Chief Executive Officer Hakan Koc said: “We are freeing capital and our customers are more liquid as a result. It’s a win-win.” Auto1 Fintech has already started in Germany and will be available in Poland and France later in 2018.
Auto1 wants to diversify its offerings and encourage customer loyalty as it seeks to become the dominant Internet platform for used automobiles. The Berlin-based company is valued at €2.9 billion and has already had an injection of cash from the SoftBank Vision Fund, which invested €460 million in 2017.
Car financing via the blockchain is likely to become of increasing interest to the fintech sector and we will probably see car loans issued directly to consumers as well as to dealerships in the near future.