ESSENTIAL MANAGED SERVICES: FINANCE AUTO LOANS THE EASY WAY

The defi Team defi INSIGHT, Managed Servicing, Remarketing, Servicing Systems

Outsourcing has become essential in just about every industry, and the auto finance sector is no exception. Managed services provides a holistic approach to outsourcing, and managed servicing is a type of managed service that focuses solely on the management of processes involved in the finance of auto leases and loans and is a business strategy catching on for lenders in the sector. 

Finance for auto loans involves a series of steps, from origination to servicing to the loan payoff and, in some cases, vehicle disposition. Managed servicing can offer an auto lender several advantages, including the provision of loan origination platforms, white-label customer service, collections operations, and other aspects of the end-to-end loan or lease process. Using managed services in finance, auto loan providers and recipients both benefit from an expert service provider. With managed services, finance of auto loans or leases becomes a partnership that gives lenders the capabilities to concentrate on their core responsibilities, expand their operations, reduce expenditures, and improve the overall consumer experience.

Instead of hiring a company to do a job on-demand or fix a specific problem, the lender outsources specific processes and functions in an ongoing relationship with an expert provider of specific managed services. To finance auto loans or leases in today’s lending environment, it’s necessary to have technological solutions that meet their customers where they are. This often involves working with companies that provide software platforms based in the cloud and who act as software-as-a-service (SaaS) providers to enhance an auto lender’s operations. Most auto lenders don’t have the necessary in-house IT capabilities to, for instance, provide assistance via smartphone or other mobile devices, which is why many turn to managed services. Finance of auto loans or leases will increasingly focus on such partnerships between lenders and managed service providers to access the most up-to-date financial technology (fintech), reduce costs, and enhance the scalability of their operations.

Using Managed Services for Auto Loan Finance

For lenders and providers of managed services, finance for auto loans and leases has focused increasingly on technological solutions. Online applications, mobile-friendly interfaces, and other digitization within the industry have given lenders a choice between adapting and falling behind their competitors. While much of this technology aims to improve user experience, the positive effects go well beyond customer satisfaction. Many of the managed services vendors help optimize a lender’s operations, making them more efficient and leading to significant cost savings.

Managed Services: Auto Loan & Lease Care

Customer care is essential to any lender’s business, as communications with their borrowers are a priority, particularly if a lender wants repeat business. From onboarding a borrower or lessee to making a final payment, lenders that can provide top-notch customer service have an advantage over their peers who don’t. When it comes to managed services, finance for auto loans and leases revolves around the ease with which a customer can contact the lender and how quickly the lender reacts to their needs.

Managed services to finance auto loans and leases should include:

  • Dealing with defaults, collections, bankruptcies, repossessions, and recoveries of vehicles.
  • Handling accounting, payments, tax filings, and other back-office processes.
  • Inbound fulfillment and handling of calls by experienced customer care representatives.
  • Managing title corrections, including releases and follow-ups.
  • Outreach campaigns after funding to welcome customers.
  • Reviews of customers’ physical addresses and other information that involve verification and updating of accounts.

The user experience is primarily based on communications between a lender and its customer care professionals. Experienced staff well-trained in customer service are an asset to any consumer-centric business like auto lending.

Providing Primary & Backup Managed Services

There are numerous benefits lenders glean from outsourcing certain services, and many of these involve managed services. To finance auto loans and leases, lenders must consider market conditions to vary deals by volume, rates, and terms. This allows the scaling up or down of operations as economic conditions warrant, giving lenders added flexibility. For lenders who already utilize a third-party vendor but who worry about their partner’s performance, it makes sense to have a backup plan for managed services. Finance for auto loans and leases requires a partner with the proper skillsets, experience, and acumen to run essential business operations while maintaining regulatory compliance.

Aspects of a managed services provider should include:

  • The ability to leverage technology to craft solutions that allow a lender to scale their operations as needed.
  • Experience in dealing with high-end assets.
  • Knowledge about all federal, state, or provincial regulations to keep a lender compliant.
  • Quick response times for delivery of a lender’s products and services, which provides their customers with a better experience.
  • Risk management capabilities that enable lenders to better manage their portfolio’s risk exposure.
  • A software platform that incorporates automation and real-time data to optimize a lender’s operations.

Scalability is perhaps the most valuable thing a provider of managed services can offer, giving lenders the capabilities they need to safely grow their portfolio while avoiding risk, regardless of the economic conditions.

Remarketing Managed Services & Finance for Auto Loans & Leases

When remarketing vehicles that have been repossessed or whose lease has ended, it makes sense to maximize the resale price. When it comes to managed services and finance of auto loans and leases, lenders should ensure their partner has adequate experience with vehicle remarketing. While lenders should ensure the technology supplied by a managed services provider is sufficiently up-to-date, they should also investigate the vendor’s other relationships within the industry to learn more about how their processes work in action.

Third-party remarketing managed services for auto loans or leases should:

  • Have a team dedicated to maximizing the resale values of vehicles.
  • Include a nationwide network that can inexpensively and rapidly deliver vehicle titles.
  • Increase vehicle visibility to ensure the best sale price.
  • Provide transport and storage for vehicles in a cost-effective manner.
  • Recommend repairs to add resale value while providing competitive and correct pricing of vehicles.

Often overlooked, the remarketing process can provide a valuable revenue stream for lenders.

Managed Services: Finance Auto Loans With defi SOLUTIONS

Using managed services to finance auto loans and leases involves choosing a partner you can trust. With defi MANAGED SERVICING, financing auto loans and leases becomes easier, allowing lenders to concentrate on managing core functions while outsourcing those that help optimize the service they provide to their borrowers and lessees. By incorporating automation, lenders gain a partner that gives their customers a cloud-based customer experience. This Contact-Center-as-a-Service (CCaaS) model allows lenders to reduce the need for IT support internally, as CCaaS providers like defi supply all the necessary software. Supporting this customer experience are chatbots that utilize conversational artificial intelligence (AI) that allow natural-sounding interactions in a digital context with intelligent virtual assistants. All this is available via an omnichannel contact center, where customer service is available through multiple channels, hosting the lender’s managed services for the finance of auto loans and leases within a single hub.

Getting Started

defi SOLUTIONS offers solutions for a lender’s complete loan or lease lifecycle. Banks, captives, credit unions, and other finance companies partner with defi to utilize the company’s market-leading solutions that help lenders exceed borrower expectations. From digital engagement throughout the lending or leasing process, defi sets new standards for flexibility, configurability, and scalability in loan management systems, originations, servicing, and managed services to finance auto loans and leases. For more information on our cutting-edge loan management system, please contact us today.

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