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Driving a Better Consumer Experience
in Auto Financing

Allison Karavos
January 25, 2023

Satisfied vehicle shoppers make for repeat customers

Did you know that 65% of car shoppers feel that finance applications take too long? Whether you’re looking for a car, an RV, a motorcycle or even a boat – some of the biggest headaches in our buying lives come from the mountains of paperwork that financing or leasing a vehicle requires. The traditional loan origination process is arduous, doesn’t benefit either the customer or the lender, and increases the risk of losing a customer before they can sign on the dotted line.

Let’s face it, customers are not keen to sit in dealerships for hours and fill out reams of paperwork to hopefully get approved for a loan. In the age of instant everything, customer experience matters. Entertainment is available on demand, your favorite milkshake can be delivered without talking to anyone, you can order a ride in minutes – consumers expect more and aren’t shy about telling the world when their expectations aren’t met. Brands that make missteps should expect to have their failures broadcast far and wide in viral twitter threads, WhatsApp groups and Facebook posts.

Consumers have power

If traditional vehicle dealers want to maintain and grow their customer base, they need to ensure consumer satisfaction. There are countless examples of small, innovative companies that grew to behemoths – they all have a few things in common:

  1. they take something (a process, a product, a service) that frustrates consumers and change it entirely to better suit the consumer’s needs;
  2. they continuously adapt to changing, emerging technology and;
  3. they treat their customers incredibly well.

Look at Uber and how they changed the face of private transportation. Or Netflix and how they’ve completely disrupted cable television. Or Airbnb and VRBO and the changes they’ve inspired in the hospitality industry. Of course, there’s also Amazon and the way it changed… everything, or Facebook and the advent of instant, social, worldwide communication. And no list of disruptive tech would be complete without Apple, the mother of all companies that entirely transformed the way people use personal technology. One of the ways that Apple has disrupted an entire industry is through functionality – or more specifically, the ease of functionality. “Using an Apple product feels so natural, so intuitive, so transparent… The design is so intuitive that the instruction manual is almost non-existent.” What if auto lenders positioned themselves the same way? And what if what they promised was actually true? These days, you can get a car delivered to your doorstep with innovative companies like Carvana or Carvago without having to set foot in a dealership. It’s never been more important for auto lenders to ensure they are easy to work with. 

More than ever before, our connected world and social media makes it possible for companies that do things really well to stand out. On the flipside, it ensures that the word is spread about companies that don’t do things well. Consumers have inside access to brands in a way they’ve never had before – they can sit on the phone waiting for a faceless customer service rep to maybe answer the phone, or they can instantly tweet their complaints and get a company rep to address their concerns in real time (while the rest of the twitter-verse watches). Even with the supposed ease of online loan applications, 90% of bank customers will abandon an onboarding application if the process takes more than an hour to complete, according to The Paypers. Bottom line? Consumers won’t sit and wait around for a subpar experience if they don’t have to.

Old versus new

So how does this translate to something like auto loan origination? The old-guard method of auto financing requires customers to fill out mountains of paperwork, provide copious amounts of data and multiple forms of identity. Behind the scenes underwriters then spend hours manually processing applications to determine a customer’s credit risk. The end result? Customers often feel like their time isn’t valued and that they are little more than a number on an assembly line. Even if you have technology in place to support increased automation and faster underwriting, as soon as your sales rep needs to make a phone call for a loan approval, you’re already too slow for today’s savvy, instant-everything consumers. But the good news is, when there are problems or lags in an industry or process, innovation flourishes. 

Captive/manufacturer finance currently owns over half of the market, so there is a lot to lose. Conversely, new competitors like smaller lenders have a long runway of opportunity. They are threatening the traditional dealership finance and sales process, and these threats are growing rapidly:

Enter in a new way of originating auto loans that can help transform the dealership experience:

  • Smart, digital applications that automatically pull information in through a decisioning platform
  • Automated KYC data, including identity verification and due diligence
  • Powerful decisioning tools that automate data gathering, risk modeling and personalized pricing
  • Loan decisions in UNDER A SECOND

A truly memorable, satisfactory consumer experience in auto financing is fast, easily available, and most importantly, personalized. Your customers aren’t just numbers and your finance products need to reassure them of that fact.

The future of auto financing is here – the question is how many auto lenders will put their customers first and take advantage of it? The kicker is, not only will those who do take advantage of it have happier, more loyal customers, but they will also be poised to innovate better, and faster. By creating new industry benchmarks – with better deals, instant approvals and personalized processes – you can stand out in the auto financing industry. And maybe even be the subject of the next positive viral twitter thread?

Download the eBook to discover how auto financing is changing. Learn how you can improve the customer experience and innovate faster with real-time data and AI-powered, automated decisioning tools.

Discover how Flexiplan, a digital motorcycle financing platform, uses Provenir to manage risk more effectively.


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