Comparison websites for contract hire prices are nothing new.
However, new player Moneyshake, which launched last month, believes it has what it takes to not only succeed, but also become the biggest player inside three years.
Initially concentrating on the personal contract hire market, Moneyshake has already secured a deal that allows it to power contract hire rates on high-profile comparison site Money Supermarket.
Moneyshake’s founders originally set out to launch a comparison site in the insurance market using the reverse auction algorithm they had developed, but then realised this market was already well served so changed focus and looked at the growing contract hire sector.
“Car leasing continues to rise in popularity as people desire new cars more frequently, and leasing is seen as the future of car ownership,” said a spokesman for Moneyshake.
“BVRLA research reveals there are more than five million leased cars in the UK. Last year, the consumer car market experienced the highest level of growth in the leasing sector at 14%.
“85% of adults in the UK have used a price comparison site and consumers are familiar with them. Our focus on the car leasing sector is based upon our own frustrations in seeking a good lease deal.”
The company has secured £500,000 in seed-stage funding from the Development Bank of Wales and serial entrepreneur Tim Scholes, a private investor and experienced strategy professional.
The company is currently a team of four employees and is now looking to expand during the next 12 months, in the process creating a range of technology, marketing and management jobs in Wales.
What sets Moneyshake apart is that it uses a reverse auction algorithm to provide the contract hire rates, so that brokers supplying prices effectively bid for business, even though the consumer sees a familiar comparison-style site.
“The reverse auction is a simple principle,” said founder Eben Lovatt, speaking exclusively to Company Car Today. “It’s the technology that’s complicated. For the business contract hire market, there will be both algorithm reverse auction bidding and also manual bidding, although obviously, the manual system is slower.”
While Moneyshake is concentrating on personal contract hire (PCH) initially, it does already offer users the option of business contract hire rates too.
From November, the firm will increase its focus on the company car market by offering fleet managers the chance to upload batches of vehicles for price comparison.
Lovatt said the business offering will be different from that of the PCH offer.
For individuals, the comparison centres upon a particular vehicle, however fleets have different criteria when picking cars.
“The journey will be different from the PCH side of Moneyshake,” said Lovatt. “The search criteria will allow filters on things such as ‘premium brands’, CO2 limits, mpg and so on.”
Lovatt gives the example of fleets looking for a set group of vehicles, rather than a specific make. “Fleets may be running the BMW 3-series, but we will be able to offer matches in terms of prestige so that an equivalent Audi A4 may be available, too.”
He added: “We are working on an upload facility so that fleets can, for instance, upload a selection of their current cars and then we will return prices for the best-matching cars.”
Moneyshake is not a full-service lease company, but instead it’s a simple price comparison site that, so far, lists cars from brokers, all of whom are BVRLA members.
This approach means the comparison site is looking to attract smaller fleets initially: “We are targeting smaller SMEs, fleets of up to 50 vehicles. After that, we’ll look to recruit larger fleets.”
This latter stage is likely to be after Moneyshake attracts larger leasing companies to its site.
“We do expect to get the larger lease companies on board too, but only for business contract hire, not for PCH. We’re talking to two at the moment about technical integration,” said Lovatt.
Lovatt’s plans for Moneyshake to become the largest comparison site in the market mean it has a target of transacting more than 28,000 cars within three years.
“At the moment the site’s running at 80% PCH and 20% business, but we expect to get to 50:50 eventually or even 55:45 in favour of business contract hire,” said Lovatt. “Our target is, we think, cautious. It’s based purely on PCH so we could double it with business contract hire.”
If this is achieved, Moneyshake could be responsible for the sale of 56,000 vehicles a year.
For its growth within the company car market, Moneyshake plans to initially work locally to its bases, at Keele University’s Science and Innovation Park and Cwmbran in South Wales, by visiting businesses. From there it’s hoping to grow through referrals.