Lenders, dealers double down on digital

LAS VEGAS — While 74% of consumers want an online experience when shopping for a car, only 25% of auto dealers could deliver this, according to year-end 2019 data gathered by Equifax.

“When you think of that [discrepancy] — we talk about dealers — but that also means lenders, because the whole transaction and decisioning is happening online,” Jennifer Reid, vice president of automotive marketing and strategy, told Auto Finance News at the NADA Show last week.

In response, Equifax has partnered with lenders and dealers to help solve this pain point, Reid said. “We want to speed the process up, [increase the] accuracy, and close some of the fragmentation in the process of buying a car. So, if everything’s online and [consumers] are going between different sites, how do you bring everything together?”

Reid noted many lenders believe that union happens in the F&I office. Yet, with lending decisions happening sooner in the car-buying journey, and with those decisions driving vehicle recommendations to would-be consumers, auto lenders need to find new ways to decrease friction in consumer-facing retail, Reid said.

Lenders and dealers have adopted three new solutions from Equifax to bridge this fragmentation: Digital ID, Digital Qualify and Digital Accelerate. Reid was unable to provide details on specific partnerships.

Digital ID authenticates the consumer, identifies them and captures consent while the consumer is online with very basic information, such as the last four digits of their Social Security number and date of birth.

“When the consumer isn’t walking through the showroom door, [dealers need another way] to know that is who they say they are online,” Reid said.

Digital Qualify takes that process a step further, allowing the would-be consumer to know what rate they qualify for and to receive vehicle recommendations from dealers and tech companies based on their pre-qualifications.

Finally, Digital Accelerate brings in the affordability aspect of the deal, Reid said, and leverages Equifax’s income and employment datasets so that lenders and dealers know they are working with accurate income figures.

“The consent piece of digital ID allows that information to be shared with dealers, so that when the consumer finally shows up at the dealership, they don’t have to start the process all over again,” she noted.

To be sure, not every customer wants to participate in the entire car-buying experience online, Reid explained. “Lenders and dealers need to have a nimble enough process that allows consumers to do as little or as much of [the car-buying journey] online as they’d like.”

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