Mercedes-Benz Bank is changing the way it does things to keep pace with the changes in auto financing needs.

Daimler Financial Services subsidiary, the Mercedes-Benz Bank in Germany, is revising its business model to accommodate the changes in mobility, such as subscription services, with which carmakers have begun to experiment.

The Mercedes-Benz Bank now finances one of every two vehicles sold by the automaker in Germany and the bank’s portfolio now totals around 970,000 cars, trucks, vans and buses on the books and grew by 12% in 2017 to 26.9 billion euros.

“In future, we will also integrate mobility services such as car sharing into our vehicle financing, in addition to making offers specifically for electrically powered vehicles,” One in every two Daimler vehicles in Germany is on the road with a contract from Mercedes-Benz Bank, he added.

“Whereas, previously, our focus was on the financing of vehicles, it has now turned to every facet of automotive mobility. The trend among our customers is towards flexible vehicle use and detailed billing that uses telematics to record the actual use,” added Reiner.

(Daimler invests millions in financing app. Click Here for the story.)

Mercedes-Benz Bank developed InScore, a rating system for drivers that helps determine what they pay for insurance.

Car loans, the backbone of automotive financing for decades, have moved to flexible-term financing long ago, with the option to give back the vehicle, continue the contract or buy and now the world of leasing has seen even greater change.

Leasing now includes flat rates, as well as insurance and service. There is also a growing demand for vehicle rentals and telematics-based products.

Reiner said at the same time, the digitalization of the business, along with smartphone bookings, is progressing. In 2017, which marked the 30th anniversary of the company, Mercedes-Benz Bank posted record figures. The contract portfolio or the value of all vehicles financed and leased, grew by 12% to 26.9 billion euros.

Last fall, Mercedes-Benz Bank introduced its first telematics-based car insurance policy “InScore” in the German market. Customers can directly influence the amount of their insurance premium with a “driver score” made up of driving style, driving time and route.

(Click Here to learn why Mercedes has taken the global luxury sales lead.)

The system allows a discount of up to 30% compared with the conventional amount and he data for calculating the insurance premium comes straight from the vehicle via a factory-installed Telematic Control Unit.

At launch, the insurance policy was available for the new E-Class and is now being rolled out for new Mercedes-Benz model series, Reiner said.

The “Mercedes me Flexperience” subscription service will give customers the option to drive up to twelve different vehicles for a year for a fixed monthly installment.

The rental price includes all costs from insurance to service and repairs to tires, including 36,000 kilometers a year. The new offer is based on Mercedes-Benz Rent, the rental offer from Mercedes-Benz Bank. The joint project was developed by Daimler Financial Services and Lab1886, the innovation hub of Daimler AG.

(To see more about Daimler’s push into ride- and car-sharing, Click Here.)

The centerpiece of the mobility offer is an app that allows the customer to digitally manage the complete handling of the vehicles round-the-clock. This extends from choosing their “dream car” to picking up and returning the vehicle. Pilot operation will launch in the next few weeks with two of the largest car dealer groups within the German Mercedes-Benz Cars Sales network.

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