Why Auto Finance is Moving Towards Digitalization

Lester D'Souza, Auto Tech Outlook | Tuesday, December 15, 2020

The auto financing operating sector is applying digital methods to attract more customers.

FREMONT, CA: The auto finance operating sector is transforming rapidly than it has done ever before. The increasing adoption of digital technologies has immensely affected the consumer-facing industries, and auto sales is also one of them. Today, consumers are more comfortable in digital environments and carry their smart devices wherever they go.

Although some dealers and lenders were quick to adopt the digital environments, the traditional dealers have to fight against online competition and their local dealerships. Today, many purely digital auto lenders are presenting the next level of competition.

Therefore, as the competition increases in the market, the pressure to produce more sales and raise the business drives the auto finance lenders to reconsider their strategic plans.

Shifting focus

Traditionally, the auto sales and finance sector always prioritized driving customers into the showroom where the salesperson and lenders can connect with them face to face so that they can make a sale. The traditional model will continue to exist, but driving the customers into the brick and mortar location will not focus on the lenders who want to become successful in the future. 

Therefore, it has become essential for lenders to reconstruct the auto lending lifecycle to compete and achieve success in the new digital era. Here are some of the methods which must be the priority of the lenders. 

A customer’s car-buying journey 

Today, the customers have grown habituated to the digital information available in other industries like telecom and banking products. Now they want to start purchasing their car from online stores. Some auto finance lenders have already begun to provide significant online components like credit approval, contracting, car search and selection, pricing, and engaging directly with the lenders. The customer’s online experience must be seamless with the in-person experience at the dealership. 

A quick and easy financing process 

Today, auto loan or lease has become a payment method for the shoppers as the car is the product they are focusing on. Therefore, it is necessary to offer an efficient financing process that closely interwinds with the car purchasing process. 

A simplified financing application process 

Most customers can get frustrated and leave the financing procedure when dealing with complex finance applications, tiring paperwork, confusing add-on products, and multiple rounds of negotiation. They want to get a quick and easy financing process and control over the experience, with the help of searching for specific monthly payments, options for electronic contracting, and easy financing process. 

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