The funds will be use to build the startups product and development as it looks to expand from car financing to embedding itself in the car buying experience.
Others in the funding round included senior executives and employees of Prospa, Harmoney and Uno Home Loans. Prospa exec Raj Bhat, a former Partner at KPMG will join CarClarity’s board, along with Mark Velik of EVP.
Founded in 2019 and launched in March 2020 by a trio who previously worked at fintechs such as Plenti, Prospa and FlexiGroup, Carclarity’s to build a better way to find a car and secure finance.
Co-founder Zaheer Jappie said the current process is broken and tipped against consumers.
“If you’ve ever browsed thousands of offers on Car Sales, negotiated a price whilst having no idea what is fair, then tried to get finance all whilst wondering what the fine print meant, you understand why CarClarity exists,” he said.
The platform connects borrowers with more than 30 different car finance lenders, matching the buyer with a lenders based on price and loan terms they need, followed by an online application process to secure their financing.
In its first 12 months CarClarity has secured more than $8 million, with more than 8000 customers using the technology to compare matched lending options.
Jappie says Covid-19 had a dramatic impact on the used car market, with prices up 40% since last April and reduced new car stock coming into the country.
“Newer used cars are scarce and as a result we have been seeing an increase in customers looking for finance before they look for a car empowering them to secure a car quickly when they do go to market,” he said.
On top of that regulatory authorities are looking at the removal of ‘point of sale exemption’, which allows car dealers to secure finance for buyers without needing an Australian Credit Licence
That change potentially adds to the appeal of CarClarity for dealers.
“We are a compliant solution and we understand the importance of customer experience, channel partners and building a strong trusted brand,” he said.
EVP’s Mark Velik said CarClarity is introducing a simple, trusted and transparent experience for buyers.
“Today 39% of consumers are making financing decisions with limited options under time pressure in unlicenced dealerships,” he said.
“The remaining 61% are navigating an opaque market online. Australians are crying out for a straightforward way to find the best car financing options at the best price. CarClarity is well placed to solve this problem.”
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