Auto finance customer experience and convenience consumers want now

What a difference a year (or so) makes. In 2019, two-thirds of car shoppers said that customer experience was more important than price, and that they’d pay more or switch brands for a great experience.¹

Today, remote shopping has moved to the fore. Nearly two-thirds of consumers want to conduct more of the purchase process digitally the next time they buy.

Dealers recognize this demand, with three-quarters saying they won’t be able to survive without digital retailing.²

Still, there’s consistency in these findings: It’s all about experiences. As the market rebounds from the Covid-19 crisis, industry players – from manufacturers to vehicle dealers to auto lenders – that deliver the best customer experience will win sales and market share.

The experiences today’s car buyers seek – from online credit applications to test-drive home delivery to eSigning of finance and insurance (F&I) documents – are focused on saving time and gaining convenience. Not all are purely digital. But all are enabled by deploying effective digital tools.

Car Buying and the Need for Speed

The portion of consumers who say they want to take their time at the dealership fell nearly 20% over three years, from 53% in 2017 to 43% in 2020. Actual time spent by buyers at the dealership they bought from dropped by 10% over roughly the same period, from 2:55 hours in 2016 to 2:37 in 2020.³

That decrease is at least partly driven by digitization. The average “light digital” buyer spends 2:49 hours at the dealership, while a “heavy digital” buyer spends only 2:07 hours – 25% less time.⁴

Buyers invest nearly half their time at the dealership on activities such as filling out paperwork – among their top dealership frustrations.⁵ That’s a key reason they prefer digital buying experiences. Buyers hope to go online to calculate monthly credit (53%), apply for financing (50%), select F&I products (41%), and review and sign the final contract (23%).⁶

In fact, 76% of car shoppers are open to conducting the buying process completely online. Yet only one in three franchise dealers has digitized every purchasing step.⁷

Consumers also want auto lenders to digitize. Some 43% of consumers cite a low rate as the most important aspect of an auto loan, lease, or subscription. But other top desires include convenience (33%), an easy payment process (29%), and online or app-enabled account management (20%).⁸

The good news is that dealer and lender investments in customer experience are having a positive effect. The portion of car shoppers highly satisfied with the buying experience increased 20% over four years, from 60% in 2016 to 72% in 2020.⁹

Auto Finance Solutions That Deliver

Both bank and nonbank auto lenders focused on optimizing experiences for their customers should implement solutions that digitize the lending process end-to-end. A robust platform should support:

• eSigning – An effective eSigning capability enables delivery of a branded, customizable eSigning experience that accelerates process steps, reduces operating costs, and improves customer satisfaction. Look for a platform that integrates with existing document and content management systems. The solution should allow capture of eSignatures by using signature devices, typed text, image upload, or voice recording. It should also enable configuration of each step of the eSignature workflow, including requirements for multiple signers and signatures, routing, and sequencing.
• eContracting – For auto finance, an eContract is an auto loan or lease that’s created and executed electronically. An effective eContracting solution should enable users to start digital and stay digital throughout the life of the loan. It should also extend loan origination and dealer management systems for complete automation of the vehicle financing process.

S&P Global Ratings predicts rising adoption of eContracts. “We expect eContracts to increase and become more substantive in subprime pools,” the agency says. “Issuers have told us that eContracts could promote better adherence to company policies, because the contracts often cannot be moved forward in the system if there is missing documentation.”¹⁰

• eVaulting – An eVault securely stores each eContract, ensuring a single, authoritative copy of the auto loan or lease document. An effective eVault maintains a time-stamped, tamper-evident audit trail throughout the life of the eAsset.

Look for an “omnivault” capability specifically designed for auto finance that provides a unified, secure digital repository to manage all auto loans and other asset types from a variety of origination channels. It should enable tight control and the ability to track the access, status changes, and retention policies of your eAssets throughout their post-execution lifecycle. It should also provide access to a broad digital ecosystem of secondary-market partners – including warehouse lenders, custodians, servicers, and investors.

As the automotive industry enters a new phase of recovery, the market is bound to experience unexpected developments and demands. But consumer expectations for superior experiences are sure to remain front and center. Auto lenders that emphasize customer experience – focused on convenience, speed, and ease of use – will position themselves to compete and win as the market evolves.