European car financing firm Auto1 FT is shifting all manual processes to smart contracts on the Ethereum blockchain, the first firm in Europe to do so, according to a press release on Thursday (Oct. 7).
The move to blockchain encompasses all documents, files and processes relating to vehicle financing, and will span the entire life cycle of the cars. It is also intended to increase security and efficiency.
“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. “In addition to new business areas that we can open up more easily with our digital processes, we’re planning through their use to work together with innovative platforms that have established themselves, such as in Frankfurt, for example.”
Smart contracts lower the overhead related to car financing by reducing dependency on paperwork and keeping overall documentation to a minimum. Working on the blockchain lowers the likelihood of errors and increases data security, according to the release.
Important data points about a vehicle’s entire lifecycle are also part of smart contracts, including previous ownership, payment methods, calculations, fees and credit scores. The new process offers car dealers increased security while keeping the user interface the same. Legally binding agreements are automatically executed with smart contracts, without the need for human intervention.
“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, Auto1 FT’s head of information technology.
Launched in 2017 and headquartered in Berlin and Amsterdam, Auto1 FT offers digital financing solutions for the used car market. The startup operates across Germany and France and is planning global expansion.