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Ten Fintechs Driving Auto Financing Innovation


September 22, 2022 | Jonathan Pryer

How to Improve the Auto Lending Experience with Technology

The very first car loan was originated by General Motors Corporation in 1919, and in the century since, leasing and financing has become a critical part of the automotive industry globally. But has the customer experience changed much since then? Picture your last automotive purchase – did it involve lots of paperwork, sitting around at a dealership, and painful photocopies of every single piece of your ID?

Ninety minutes is all it takes for customer satisfaction to decline at a car dealership, and according to AutoTrader, 65% of car shoppers think that financing and paperwork take too long. But don’t fret – as the world continues its rapid advance towards digitizing everything, auto lenders are following suit. In fact, 72% of consumers want to complete credit applications and their financing paperwork online. So we’ve found ten innovative fintechs/financial services organizations that have figured out how to help them do so or have innovated other aspects of the auto financing process.

  1. Upstart – Auto Retail: Combining online and in-store digital retail capabilities, Upstart Auto Retail aims to help car sellers/dealers create a truly omni-channel purchasing experience. Upstart is an AI lending marketplace that looks to improve access to credit, and has automated the auto lending experience, enabling more loan approvals in real-time, based on individual pricing and financing rules established by the dealer.
  2. Caribou: With a mission to put drivers in control of their automotive finances, U.S.-based Caribou enables ‘flexibility and freedom’ in car payments, thanks to their fast and easy auto refinancing program. Offering instant access to competitive financing rates and a secure online application platform, Caribou saves its customers an average of $100 per month on their car payments.
  3. TU Auto Payment Shopper: Combining affordability with real-time inventory, TransUnion’s Auto Payment Shopper is an upgraded retail portal that allows consumers to complete more of the auto financing process online. Enabling consumers to compare vehicles (and vehicle payments) before submitting an application, the program, in partnership with CarNow, ensures people understand which vehicles they can afford before having to go through the entire process.
  4. Cazoo: UK-based Cazoo allows consumers to buy or finance vehicles entirely online, with delivery or pickup of new cars in as little as 72 hours. Promising ‘simple’ financing of used cars, Cazoo offers competitive interest rates, fast decisions, and applications and agreements for financing all done online, thanks to its data-driven strategy.
  5. AutoFi: With online commerce and showroom options, as well as a whole suite of APIs, AutoFi enables auto lenders to incorporate digital sales and finance tools right into their existing platform or build their own from the ground up. And AutoFi ensures automated financing processes with direct partnerships with over 40 lenders, smart lender routing, and real-time decisioning direct to consumers.
  6. Carvana: Carvana, one of the leading online car-buying sites in the U.S., also makes it easier for consumers to finance used vehicles. Consumers can browse the site to find their next vehicle, apply for financing directly with Carvana, and have their new vehicle delivered right to their driveway. With their pre-qualifying auto loan program, the company allows buyers to browse inventory with personalized financing terms, without impacting credit scores with hard credit checks until they are ready to buy.
  7. Automatic: Billed as a one-stop-shop for auto financing, Automatic is a platform that allows both small and large independent dealerships to take control of their financing products. Featuring an open marketplace that enables dealers to connect to a variety of financing options instantly after pushing through a credit application from a consumer, Automatic offers real-time results and speedy approvals, all in a single online platform.
  8. AusLoans: Based in Australia, AusLoans Finance Group positions itself as one of the nation’s leading Asset Finance aggregators, thanks to its dedicated investment in technology and transparency, and also offers customer financing options for automotive businesses. Featuring a point-of-sale automotive financing solution, partnerships with over 40 local lenders, fast approvals, and paperless application processes, AusLoans can offer loans of up to $500K to dealerships to pay for automotive services.
  9. Ally: Ally, a leader in digital financial services, also offers personal vehicle financing with flexible terms and easy payment options. With online account management and a mobile app for customers to keep on top of their account on the go, Ally aims to provide auto financing that fits every type of consumer. They even offer specialty vehicle financing, with flexible terms that cover accessibility needs like hand controls and wheelchair lifts.
  10. CarDoor: Partnering with multiple lenders, Canada’s CarDoor ensures consumers get the best possible financing rates and receive approvals in only minutes. With a completely digital car buying process, CarDoor offers an online application process and financing that is promised to be secure, transparent, and flexible – all at the best possible rates. And as a bonus, customers can pre-quality with only a soft credit check, and approved loans also get a free TransUnion Risk Score Report.

These organizations all understand that a memorable, satisfying consumer experience is one that is fast, digital, and easy. The future of auto financing is here, but how can all lenders join the club? One way to ensure automated decisioning, rapid approvals and personalized experiences is with real-time data and AI-powered decisioning solutions. Being able to easily access, integrate and analyze alternative data especially is key, thanks to today’s increasingly diverse populations. Many people globally don’t have traditional credit histories or can’t easily prove creditworthiness with a traditional credit report or score. But being able to integrate things like rental and utility payment data, social media and web presence info, and travel information can help. Despite the current economically uncertain climate, Mordor Intelligence predicts that the global automotive financing market is expected to reach $300 billion by 2026, so there’s never been a better time to drive more innovation in auto lending.