Would You Buy a Used Car from This Bank?

25 October 2001

Hoping not to emulate the hostile political ad that buried Richard M Nixon’s first shot at the presidency, Britain's largest high street bank Lloyds TSB believes that thousands will shell-out for a used car during the first twelve months of its new venture – an online car sales emporium.

Unlike most of the dotcom corpses littering cyberspace, Lloyds will not splurge nine-tenths of its start-up capital on profligate marketing, instead focusing on its own staff and several million existing customers. The bank’s business plan assumes that some three thousand of these will buy either a new or used car from the venture during its first year.

Lloyds, whose business interests extend beyond banking to car rental, will capitalise on its buying muscle to offer consumers competitive prices, retaining only a small margin for itself.

Not, as you might expect, motivated by altruism or an unaccustomed attack of public spirit, but by the rich pickings to be had from financing auto purchases. “The main profit opportunity for us is from the finance for the car,” admitted Mark Stokes, Lloyds' customer relationship director.

The bank will also unload its used rental cars via the site, thereby neatly circumventing auctioneers’ commission.

News source: BBC Online Business News (UK)