Bank of America Competes With Chase Auto for Online Direct Space
Bank of America recognizes that it’s not the first to offer a direct auto lending portal for consumers via an app and website — the bank launched a new pilot program last week — but David Doyle, the company’s consumer bank product and pricing executive, said the lack of a third party intermediary is a big advantage. An advantage the bank hopes will be useful as it goes head-to-head with its biggest competitor in the space: Chase Auto Finance.
In August, Chase Auto Direct launched to consumers nationwide, offering financing on vehicles linked to local dealer inventories, powered by the online car marketplace TrueCar. Bank of America’s newly announced pilot works effectively the same way, but it is not linked to a third-party, like TrueCar.
“With our transaction, there are two economic participants in the transaction and with Chase there are three — and none of those three are nonprofits,” Doyle told Auto Finance News at CBA Live last week. “So, three people get paid over there, two people get paid with us — net, net we think that results in a better outcome for consumers.”
Through Bank of America’s new portal, the price of the car is up to the dealer and the consumer to work out, Doyle said. “We’re not stepping into that space, we’re just enabling them to get together, then work on the price of the car with the financing in place, and simplifying that transaction to make things more clear and transparent for the consumer as well,” he added.
Bank of America will also continue to grow its current, year-old direct auto lending product, which allows consumers to apply online for financing not attached to a specific inventory-car. Both products bring something new to the marketplace, said David Hollodick, senior vice president of consumer vehicle lending and product executive for the bank’s dealer financial services division.
“We’re clearly not first to market on it, but I think we’ve created a unique value proposition,” Hollodick said. “We think we’ve really brought together a well organized end-to-end process that’s a win-win for everyone included in the process.”
Learn more about the tech and disruption in the industry at Auto Finance Innovation 2017, May 17-18 in San Diego. Visit www.autofinanceinnovation.com and to learn more about the Auto Finance Risk & Compliance Summit, visit www.afrcs.com.
