Today on Inside Automotive, we welcome Andy Mayers, Lender Solution Strategist at Dealertrack, part of Cox Automotive’s family of automotive brands, to help us understand how lenders are approaching digital transitions in the auto industry. Currently, more than 85% of new car purchases and 54% of used car purchases require some form of lending, so it’s critical that car dealers and lenders know how to work together, especially as we transition more and more to digital processes.
Dealertrack has found that auto lenders are trying to adapt and move toward automated and digital-focused strategies. In 2021, many vehicle transactions moved online and moved up the funnel outside of the dealership. So, auto lenders are now trying to figure out how to support and fuel the auto finance economy in this digital age. They’re aiming to eliminate the back and forth that goes on between a traditional F&I manager, the buyer, and an underwriter. Automations can be leveraged to reduce this time and energy spent.
|Related: Dealertrack DMS’s Michael Panozzo on how to best empower your accounting department|
Mayers says there are a few best practices he recommends to achieve this. The first is providing alternative deal structures. For the online experience, you want to be able to provide a consumer or the dealer, multiple decision responses. When they’re shopping for a car, the consumer might not know exactly how much money they want to put down on a vehicle. They might change their mind, so try to get multiple approval options all at once in preparation. Let the consumer know the flexible options they have. Customers also want to sign contracts remotely, so lenders need to be able to support digital contracting and e-signatures. Lastly, give the consumer the ability to send information to a lender for validation in advance.
These practices all but eliminate the need for face-to-face interaction, if that is what the customer desires. Once the contract is correct, ensure the documents that are associated with it like aftermarket products, agreements, and insurance co-signer notices are all captured and properly prepared. Digital contracting ensures that the consumer is informed exactly where to sign. Combined with the ability to validate the information, lenders can have confidence that the contract package they receive is actually a contract.
To learn more, visit Dealertrack here.
Did you enjoy this interview with Andy Mayers? Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at firstname.lastname@example.org.