P2P lender Zopa moves into auto loans

British peer-to-peer lender, Zopa, has announced its entrance into the auto loan financing market, as it chases an entry into the £12bn market. The new product is seen as significant as it makes Zopa the first British P2P lender to enter the auto finance space.

Zopa’s got a new finance product, expanding into car refinancing loans and more

Peer-to-peer lender Zopa is branching out with a new loan product offering car refinancing in a bid for a share of the £12bn a year market.

Around 40 per cent of Zopa's loans are used for buying a car and Zopa Car ReFi will be a dedicated product aimed at those who already have a car loan but are looking for cheaper rates.

It claims to be the first online car refinancing product in the UK, offering quotes and taking care of the paperwork to switch over the loan, which is paid off by Zopa and a new deal agreed with the p2p firm.

Read more: Zopa becomes first UK p2p lender to hit £1bn loans

"This is a market worth £12bn per year with plenty of space for customer-first innovation – something we have specialised in at Zopa for over 11 years," said Zopa chief executive Jaidev Janardana.

"Buying a car is by far the most common reason for a customer to take a personal loan from Zopa, so we are proud to now also offer a product that can help customers that already have a car on a finance agreement."

Debt consolidation and home improvements are the other major reasons for taking out a loan on the platform.

Read more: Digital challenger bank Tandem smashes crowdfunding target in minutes

Zopa is exploring partnering with car dealerships in future to offer car financing directly to consumers at the point of sale. It's also set to announce new partnerships in other sectors to offer direct to consumer loans at the time of purchase.

It's already partnered with Uber to offer loans for it drivers when purchasing a car and energy company Flow to offer customers financing for boilers, however, the new partnership is expected to be a broader one.