LAS VEGAS — As powersport dealers and lenders tap into technology to boost efficiency and transparency, others hesitate to embrace technology due to regulatory concerns and the risk of fraud.
Powersport dealers are increasingly integrating digital tools to provide consumers with insight on model prices, rates and monthly payment estimates, Jonathan Gray, principal product manager at digital marketplace provider Trader Interactive, told Auto Finance News at the AIM Expo Powersports Tradeshow today.
“Digital retailing finally seems to be taking hold of dealerships,” Gray said, noting that fewer dealers are opposed to displaying the MSRP or sales price on online listings out of fear nearby dealers will “undercut” their offers.
Banks still hesitant
On the lender front, more credit unions are also using tech to prioritize transparency for consumers, Gray said.
“Credit unions used to be localized to the communities they were in, and now we’re starting to see them go nationwide, while making technology quite transparent across multiple streams,” he said.
Banks are sometimes less willing than credit unions to embrace similar tech in the powersports space, he said.
“We are talking to more credit unions than ever before,” Gray said. “Maybe they’re small enough where they can adopt digital retailing sooner, things like being able to make APIs accessible so I can push a credit application into their loan origination system.”
Fraud is also a concern for lenders navigating digital retailing. Synthetic identity fraud, in which fraudsters create false identities combining real and fake information to apply for credit, for example has led to losses for recreational vehicle dealers. A 700Credit RV dealer survey conducted in November found that 42% of dealers said they knew of synthetic fraud but were unfamiliar with how synthetic IDs are created.
“People want fast, convenient solutions, but that also introduces fraud,” Gray said. “It’s a higher risk, but there’s revenue potential. And if you don’t do digital retailing, you’re going to be out of business within the next couple years.”
Catching up with auto
Dealers and lenders in the powersports industry should look to the auto market for lessons already learned, Gray said.
Automotive online marketplaces often have prequalification tools for financing, as well as vehicle description pages, which showcase cashback offers, incentives and the price after those discounts, he said.
“It’s fun to look into the crystal ball of automotive, where you can’t go to a marketplace search results page without seeing the live rates computed real-time in front of you,” Gray said. “That’s the transparency that has really made the auto industry green.”
Powersport marketplaces, however, are “about 10 years back from all those lessons learned in auto,” he said.
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