How digital is changing the landscape of car loans and automotive finance

[freemexy]

Technology has disrupted almost every customer journey across a wealth of industries, and the automotive sector is no exception. From researching online, to Toyota’s immersive AR shopping experience, it is little wonder Gumtree research shows that two in five Australians are considering taking the final leap into digital - purchasing a car directly online.To get more auto news today, you can visit shine news official website.

Dealers are already embracing technology in a significant way, with 58% spending the majority of their budget online to reach customers. Yet there is still a disconnect between the kind of services customers expect and want from a dealer, and a dealer’s willingness to provide them.
Gumtree Cars research highlights that there is a gap in several areas of the car shopping journey. While free servicing for 12 months is the promotional offering consumers find the most appealing, that’s not commonly offered by dealerships. The research also revealed a buyer-seller disconnect when it comes to discounts around vehicle accessories, on road costs, as well as financing.

The good news for car dealers is many Australians still look to them when securing car finance. Dealer finance may offer lower rates than car loans through a traditional bank, but these rates may only be available on specific makes and models and are usually only available for new cars. However, a survey by analytic software firm FICO found Australians are reluctant to shop around when looking for a car loan, with 52% only considering one lender.
Despite these challenges, the connection between car dealer and customer remains important. The 2019 FICO survey also revealed more than a third of Australians (35 expect to get vehicle finance through their dealer. Recent scrutiny from the Royal Commission into Banking and Financial Services, and ASIC’s guidance on financing means that dealers need to innovate in order to restore trust and transparency between themselves and their customers, and to offer a better service.

Despite this, the research found 67% of customers agreed that they felt in control of the car finance process, and nine in 10 reported getting a great or good deal on their most recent car loan.
Globally, we’ve seen innovative digital start-ups are reshaping and speeding up the challenging car shopping journey through alternative finance options. Boston Consulting Group, for example, found that “aggregator platforms are developing ­direct-to-consumer channels that will allow buyers to shop online for loans and get them approved before going to the dealership.”

At the same time, dealerships have also been realising that the sooner the deal is made, the better it is for everyone involved, and consequently are taking proactive steps to streamline the financing process. Ford’s Ready.Shop.Go. in the USA is one example of an online platform that allows prospective customers to find a car, view pricing and incentives, schedule a test drive, apply for financing, estimate trade-in values and then lock in a deal for up to 48 hours.