Blockchain technology has already brought about a wide variety of developments in various sectors, and the car financing sector seems to be next. In an innovative move, the leading financial partner of the automotive industry, Auto1 FT, is eliminating all manual input and paper processes from its core business. “Our digital solution brings enormous efficiency benefits for car dealers and is setting new standards in the mobility industry,” said Auto1 FT Managing Director, Taimur André Rashid.
Auto1 FT was founded at the end of 2017 and currently has offices in Germany and France. Since it was founded, the European fintech company has constantly worked toward a digital future for car financing.
Now, it is replacing traditional, manual procedures and paperwork with smart contracts that work on the Ethereum blockchain. This is a significant step toward the complete digital mapping of vehicles and will bring about a lot of changes in the industry.
For example, as a result of this, the mobility industry will get to experience benefits such as faster, more efficient, and safer processing and documentation of vehicle financing.
Utilizing smart contracts to facilitate maximum data security and efficiency
From now on, all documents, files, and processes that are related to financed cars will be based on smart contracts, which also means that they will span the entire life cycle of a vehicle. In other words, every vehicle that’s financed by Auto1 FT will receive a smart contract based on the Ethereum blockchain. This makes it the first car financer in Europe to convert its entire ecosystem to a smart contract-based one.
“Smart contracts are based on the outstanding properties of blockchain: they are tamper-proof, unalterable and transparent, and are verified by the community. This is what makes them so valuable for our purposes,” said Nuno Vaz, Head of Information Technology at Auto1 FT.
The company offers fast and easy digital financing solutions for the used car market. Further, through smart contracts, Auto1 FT can now provide all vehicle-related contractual details in a single agreement, which paves the way to complete digitization.
This move will most likely have a big impact on the European car financing sector, as it massively reduces the amount of paperwork that needs to be done to finance a used car. Further, it will increase data security and process efficiency.
The smart contracts will contain all central information and relevant data points concerning the entire life cycle of a vehicle, including payment modalities, calculations, fees, and credit scoring.
In June 2021, Auto1 FT has already made headlines by being Germany’s first automotive company to conduct a security token offering (STO). This offering essentially tokenized a corporate bond valued over €4 million. With the firm’s latest move into other blockchain-enabled technology such as smart contracts, Auto1 FT seems to be well prepared for a world where automation and digitalization are key to success.
Image by zackthemazdaguy from Pixabay