Why Auto Dealers Should Consider Digitizing Their In-House Lending Programs
The digital age has brought us many things – cloud storage, machine learning, automation and a whole host of other advanced technologies that have enabled businesses to operate more smoothly and ditch many siloed and paper-based ways of doing things.
Even though these new, innovative tools are now accessible to companies in nearly every industry, some organizations have only implemented a few of them.
Auto dealerships are a prime example of this.
The car buying process, even when taking place at a mostly modernized company, still feels like it did ten years ago. Sitting down at a sales desk, weighting handwritten numbers, waiting while the salesperson gets up to “ask” their supervisor – sound familiar?
But where vehicle buyers can often get the most impatient is the loan approval process, where even the most forward-thinking auto dealers are still relying on outdated and sluggish procedures and borrower evaluation approaches that take much longer than they should in the modern business environment.
Thankfully, it’s now incredibly simple and affordable for auto dealers to digitize their loan application process, bringing their customer experience into the modern age and – in the process – winning and keeping more clients.
An industry propped up by borrowers
Auto loans are a massive market. The simple truth is that the vast majority of car shoppers end up financing their vehicles.
More than 85% of automobile purchases are financed. In just the United States alone, there are more than $1 trillion in outstanding auto loans.
Borrowing funds to pay for a vehicle purchase is the norm, and it’s not going to shift anytime soon.
And financial institutions aren’t the ones generating all the profit from America’s addiction to auto loans, since your average car dealership racks up more than 40% of its gross profit by operating a lending desk connected to banks, credit unions, and direct online lenders.
The problem is that dealerships have to share the profits generated from their buyers’ auto loans with the banks they work with.
But, in the modern era of cutting-edge and instantaneous software solutions, why are dealerships still partnering with banks to help car buyers finance their purchases (and sharing profits along the way)?
Wouldn’t it be more profitable to take care of all lending in-house?
The answer is yes.
And not only would an in-house auto financing feature help businesses retain more of their revenues, it also helps seal the deal with impatient or on-the-fence car shoppers.
Is my loan approved yet?
Even today, most auto lending application procedures take a while. Buyers take notice.
The unfortunate truth is that many car dealerships out there are relying on outdated methods to get their buyers approved for an auto loan – from manually entering information into spreadsheets to waiting for external borrower assessments to be completed.
Not only does this slow things down considerably, the old way of doing things is significantly more prone to human error.
Even worse, an outdated auto loan approval system can cause impatient customers to let their eyes start to wander – to other lenders, that is. People even start shopping around on their smartphones while they’re still in the dealership, and can easily find an instant quote and approval while the dealer is still walking across the room.
Especially since modern consumers have grown accustomed to instant decisions and quick purchases, auto dealers shouldn’t be surprised that their sluggish loan approval process has them considering a quicker option.
The next era of automated, end-to-end auto financing
Thankfully, recent advances in software technology have enabled innovation in the area of auto financing. Now, it’s entirely possible for auto dealers to ditch their relationships with banks and manage their lending programs from start to finish – including quick approvals and out-of-the-box automation.
TurnKey Lender’s auto financing software is tailor-made for car dealer businesses, and provides a simple, end-to-end loan management solution that automates the entire loan lifecycle as well as specific phases of the lending process.
The product is ready to use out of the box, and can be launched in a dealership of any size in a matter of days – with little to no learning curve for both your sales team and potential vehicle buyers.
TurnKey Lender’s auto financing solution fully automates borrower risk analysis, loan origination, underwriting, collateral management, debt collection, loan servicing and the vast majority of a dealership’s lending reporting tasks.
Not only does it empower dealerships to automate their entire lending process from start to finish, the solution integrates with credit bureaus, payment providers, VIN decoding solutions and e-signature services to make the loan application process a breeze for all potential buyers.
From bad credit to thin credit, used cars and new models, TurnKey Lender’s user-friendly auto lending software makes the entire experience smooth and effortless for everyone involved – and potential borrowers won’t even consider looking elsewhere for their auto loan.