Auto dealers have plenty of options when deciding which lenders they want to partner with, but why should they choose you? Two key factors are the lender’s programs and customer service. From a program perspective, incentives, flexibility and customization are important. From a customer service perspective, everything from onboarding and account management to lender support during credit, funding and payments is essential.
A third accompanying factor is technology – specifically a digital dealer experience. Enhancing dealers’ experience with digital tools can significantly improve their satisfaction and overall efficiency. Let’s examine how this applies to the loan origination lifecycle.
1. Equip your dealers with a digital portal
Keep up with current dealer expectations by offering a digital dealer portal. Most lenders are already providing dealer portals for customer service and information on incentives, programs and more. Lenders can take this one step further by offering dashboards with analytics. Allow dealers to view how many deals they have in flight, how many they’ve submitted and how many they’ve had funded. Each deal in progress should display its current status, the following steps and any outstanding requirements. Key financial metrics should also be included, including profit per deal, overall earnings and how close the dealer is to hitting bonuses.
2. Provide flexible deal-making, 24/7
Once an application is submitted, most lenders respond within seconds with an automated decision. Lenders can enhance this process by returning multiple offers to the dealer. In addition to the originally requested deal, consider returning several deal structures. These structures could reduce or eliminate the down payment, maximize the dealer’s profit or minimize the monthly payment. This can be further enhanced by offering additional benefits to preferred dealers. For example, some dealers may be allowed to configure their favorite deal structure options in the dealer portal. This gives them the flexibility to prioritize earnings per deal or deal volume, depending on their individual circumstances.
Once the offer is received, dealers may want to adjust the deal structure further. Functionality for receiving this is often limited on the dealer’s system. Make the dealer’s life easier by allowing them to restructure the deal to their liking. Dealers should be able to create several options and compare them side by side before making their selection. This feature should be available on the dealer portal, with a mobile-friendly user interface that allows dealers to use it anytime, anywhere.
3. Keep paperwork off the dealer’s desk
Lenders know very well that dealers don’t like chasing stips. There are several opportunities for enhancement with digital tools in this area. During the automated decision process, the lender’s risk model will flag the stipulations, which can be cleared with digital verification tools before sending the decision to the dealer. There are several digital verification providers such as LexisNexis, The Work Number and Neustar, which verify a borrower’s identity, income and residence information.
If stips are being collected, make the process more efficient by offering dealers the option of sending a text message to the borrower, who then uses the linked digital portal to upload photos of their documents. This service bypasses the dealer and makes those documents immediately available to your funding team. There are several providers on the marketplace offering stip collection via texting, including Solutions by Text.
4. Aim for the end goal of digitization
Each piece of the digital dealer experience puzzle fits together to help lenders aim for the ultimate goal of same-day deals. This means that the app is received, decisioned, finalized, verified, signed and funded on the same day — without any required human action on the lender side. Get the ball rolling with your technology team to implement these digitization strategies, and make your dealers happy.
Shim Mannan is the executive vice president of product and business development in the Americas for White Clarke Group.
