USAA Aims to Revolutionize Auto Finance with New iPhone App
USAA, the financial services provider mainly to the US military community, today introduced an auto buying and selling iPhone app that could revolutionize auto finance.
The Auto Circle allows USAA members to not just finance a vehicle purchase via iPhone, but also to buy and insure a new vehicle — through USAA.
It’s the purchase of the car through the app that caught my eye. USAA actually facilitates the transaction through “certified USAA dealers.” That means USAA crosses the bridge from finance provider to car buying service.
Here’s how Javelin Strategy & Research explains some of the additional features of USAA’s new app:
And once the negotiations [for the car’s purchase] firm up, the app enables customers to compare the cost of USAA loan with financing through the dealership – including insights into whether the borrower would save more money by taking the manufacturer’s rebate and USAA’s 3.9% loan rather than taking the manufacturer’s tempting 0% financing. For both borrower and USAA, that’s powerful information delivered at a decisive moment when the financing pressure is at high-stress levels. Then, even as the dealer is processing the sale, USAA customers can handle the chore of adding the new vehicle’s VIN to their insurance policy, and then drive off knowing exactly what their insurance bill will be.
Interestingly, Javelin discloses that the Auto Circle app did not come cheap to USAA. According to Javelin, “Auto Circle took about nine months and ‘multiple millions of dollars’ to develop, vs. ‘$500,000 to $600,000’’ for the bank’s initial iPhone app, said executive vice president Jeff Dennes.”
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