Over the past decade, an increasing number of buyers have turned to online resources to shop for vehicles. Though not yet as prevalent as the “on-the-lot, kick-the-tires, face-to-face, paper-intensive” traditional car purchasing process, with the sudden commerce disruption caused by COVID-19, the auto industry has been forced to quickly and aggressively adopt means to transact business online, and dealers and lenders are beginning to make this transition.
Recent industry publications highlight a few key aspects of the trend.
- Cox Automotive noted, “As social distancing becomes the refrain for our battle with the Coronavirus, it’s no wonder that 55% of shoppers now say they prefer NOT to visit the physical dealership.”
- Digital Marketing Industry News reports customers wanting car dealer experiences from home. In fact, 18% of potential car buyers would purchase cars sooner if they could do it online.
Call it mobile, contactless, remote, or any other term you deem to describe “the new normal,” but online business is becoming a necessary means of commerce. For lenders, the ability to offer auto loan online applications is more critical than ever to their current and future success.
An Overwhelming Demand for Auto Loan Online Applications
In the evolving trend of delivering a completely online vehicle purchasing experience, auto lenders clearly play a vital role. In the online model, obtaining an auto loan should be as easy as (if not easier than) conducting vehicle research online. Certainly, it should take significantly less time. With financing approval obtained in minutes (not hours or days like with paper-intensive loan applications), a highly motivated buyer can shop with confidence.
A completely digital auto loan online application process will:
- Initiate auto loan applications anytime, anywhere via desktop or mobile device.
- Intuitively guide the applicant through the process, efficiently and accurately obtaining the required applicant information.
- Digitally capture any supporting documentation, such as a driver’s license and pay stubs.
- Provide rapid decisioning, ideally without requiring the intervention of an underwriter, within seconds.
An auto loan online application process not only addresses the immediate need to accommodate buying behaviors brought about by COVID-19, but also positions lenders to take advantage of the growing market segments of Millennials and Generation Z members who “live mobile.” In fact, mobile transactions are their preferred means of doing business. These two generations combined outnumber boomers, so catering to their preferences can prove critical to a business’ current and future success.
Choosing Loan Origination Software for Online Applications
Auto lenders needing to quickly improve their ability to offer online applications should look for loan origination software solutions that enable rapid development and flexible deployment. When evaluating software to support auto loan online applications, consider these features:
- The ability to build online applications once (using REACT technology) and deploy to different devices.
- WYSIWYG menus to create the user experience, easily placing text, fields, images, and buttons to create an intuitive, on-brand experience.
- Masking, minimum/maximum values, and data validation rules to ensure data is entered correctly and accelerate loan decisioning.
- Logic display to streamline the application process, showing conditional fields based on previously entered data.
- Simulated desktop and mobile environments that allow you to preview and test the application process to ensure an easy and intuitive user experience.
- The ability to digitally capture required documentation and automatically include it in the application.
- Functionality to support e-contracts and e-signatures for quick responses and confirmations.
The Benefits of a Well-Designed Online Application Process
Auto loan online applications have never been more important. We’d make the case that they’ve become essential to maintaining a competitive business in today’s environment. A well-designed auto loan online application can boost a lender’s portfolio by:
- Reaching a larger number of potential customers, particularly market segments favoring mobile transactions.
- Quickly and consistently offering risk-based lending terms that capture a greater number of loans using workflow, decision rules, and cloud-based lending services.
- Eliminating manual decisions to significantly reduce loan processing and positively impact the bottom line.
- Easily modifying loan application processes to meet changing market needs or address specific market segments, such as marine and recreational vehicles.
Auto lenders currently challenged by the need to provide a completely digital auto loan online application process should evaluate the capabilities of defi SOLUTIONS’ loan origination offering. Our quickly deployed, fully configurable loan origination system positions lenders to meet the online needs of today and be well-prepared to accommodate the needs of tomorrow.
defi SOLUTIONS provides configurable loan origination systems, loan management and servicing, analytics and reporting, and a wide range of technology-enabled BPO services. If your ability to support a completely digital auto loan online application is lacking, take the first step toward filling that gap. Contact our team today or register for a demo.