It’s no secret that consumers want to shorten their time in the F&I office. A 2018 study from Ernst & Young Global Limited predicted a paradigm shift in automotive retail. Digitization, regulations, evolving customer needs, and new competitive selling methods necessitate a rethink of the retail model. In fact, 72% of consumers feel that an improved buying process would motivate them to visit dealerships more often.
There is one area where both dealerships and lenders can make real progress in improving the buying process. Most lenders and dealerships have some online digital tools and a pre-approval process to aid consumers in their selection process. But many could do a better job of educating consumers on the auto finance process itself – this includes putting basic F&I product information online. There are resources available that are being underutilized that can differentiate progressive dealerships and lenders in the market. By positioning themselves as an informative online resource, both dealerships and lenders can make major strides in meeting consumer demands and differentiating their offerings.
Also, lending partners can assist dealerships by speeding up the process of pre-approvals and credit checks. By working together, lenders and dealers can position these two tools at the right place to be accessed at the right time.
In its ongoing study of consumer credit and shopping trends, Equifax Inc. found that 52% of prospective purchasers underwent a credit check prior to going to a dealership. Just 15% have the intention of getting pre-approval on their desired vehicle. Nearly a third (32%) said they do not plan to seek pre-approval at all during the shopping process. By educating the consumer on the benefits of an advance credit check and pre-approval, both dealers and lenders can get down to the business of finalizing the deal faster.
By encouraging more pre-approvals, dealers also may create a less adversarial environment when it comes to negotiation, in addition to a more expedited shopping process. One method to encourage pre-approvals is to direct consumers to create online profiles during the research phase of shopping.
According to the Equifax research, approximately 35% of consumers who did not create a profile ended up spending more than they expected on their vehicle, compared to 29% who said they spent less than what they expected. Online profiles and customized search processes help consumers navigate to better options that suit their specific needs, helping to build trust with dealers and lenders.
With more than 40 years of experience helping dealers and lenders differentiate their business and grow profitability, EFG Companies can bring you up to date on meeting customers where they are — online. Fortify your business with EFG. Contact us today to learn how our solutions provide the greatest return to you and your dealership partners.
