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TRADING & TECH
Now GPS will calculate your monthly car installment
Idea Bank Group launches Happy Miles – a pay-as-you-drive financial product
January 9, 2017: Imagine a scenario where your car installment is paid depending on its usage. This is what Poland-based Idea Bank Group has come up with. ‘Pay-as-you-drive’ is the world’s first car loan model where payments are calculated in strict accordance to the travelled distance. Precise information on kilometers covered is automatically sent to one’s creditor company via a GPS device installed in the vehicle. Monthly payment is the distance multiplied by a KM-based rate, plus a small fixed amount
Let’s imagine a sales representative at a toy company. He has a car. Unfortunately, flu or a vehicle breakdown makes it impossible for him to work for two weeks. The car is not used, business freezes. Luckily, installments also decrease significantly, protecting the company from liquidity problems.
Happy Miles is a fintech project delivered by the Idea Bank Group. Dominik Fajbusiewicz, Idea Bank’s executive and the brain behind the Happy Miles concept commented: “We are creating an engine that might become widely popular in services associated with the financing of sales and rental of passenger cars, trucks, agricultural machinery and construction equipment. The car loan market is the first we want to introduce the new technology to. Fintech trends are quite strong in the banking sector, but the car financing services lack innovation.
“What is important, in Poland, due to tax regulations, a popular and economical form of car financing is leasing. It’s like the market’s asking us to be transformed. The acquisition of Getin Leasing, which along with Idea Leasing covers almost 15% of the car loan market in Poland, has provided us with some perfect tools to do so.”
The Happy Miles concept fits the newest global economic trends. They go by various names – access economy, gig economy or sharing economy, and they’ve laid foundation for businesses such as Netflix, Spotify, or Uber. These trends are the consequence of the changing structure of consumer behaviors and needs: people’s tendency to refocus from ‘having’ to ‘using’.
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