Auto dealers could capture a $4.7 billion opportunity by addressing mismatched payment quotes between dealer-submitted credit applications and lender approvals, according to a new analysis by eLend Solutions. Joining us on the latest episode of Inside Automotive to discuss the findings, confirmed by a nationwide dealer survey, which highlight the financial impact on both front-end and back-end dealership operations, is founder and CEO Pete MacInnis.
eLend Solutions examined thousands of credit applications submitted to more than 100 lenders and found that less than 60% were approved, with only 32% approved at the initial quote dealers provided. When approvals did not match the dealer’s original offer, monthly payments were, on average, $32 higher for new vehicles and $36 higher for used vehicles.
With 82% of respondents claiming fewer than 40% of submitted applications being approved, 95% reported having to rework vehicle deals due to quote mismatches. For some dealers, over 30% of new vehicle sales required adjustments to align with lender approvals.
"Every dealer needs to take a look at this. Because sometimes business goes on, dealers run their lives, they run their businesses, and they don't realize that in instances like this where the payments aren't matching up, it also affects your CSI."
The financial consequences, however, noted that 87% of dealers reported reduced front-end gross profits and affected deals, with 56% adjusting profit by $300 or more. Meanwhile, mismatched quotes were similarly affected, with 93% respondents acknowledging that deals fell through. Back-end finance operations were also linked to lost sales, as 40% of dealers said correcting payment discrepancies added 31-45 minutes to the sales process. Meanwhile, 78$ estimated that finance penetration could increase by at least 11% if initial quotes matched lender approvals.
Notably, eLend Solutions aims to solve this problem with its new fintech platform, Dealmaker. The tool is designed to align dealer quotes with lender approvals, restoring lost gross profit, reducing deal rework, and improving customer transparency. According to MacInnis, Dealmaker represents the kind of solution the industry needs to capture lost revenue and optimize dealership operations.
Ultimately, mismatched payment quotes are draining dealerships’ profits and patience. With tools like Dealmaker, dealers can stop losing time and money, lock in more sales, and give customers a smoother, more reliable buying experience.
To learn more about the recent eLend Solution report, click here.
