Reimagining the auto finance process means starting with a fresh perspective and taking advantage of digital and AI tools to improve speed and transparency.

It’s time to reimagine the auto loan and leasing process. With all the digital tools at our disposal, buyers expect a process that’s fast and transparent. And it could mean a huge increase in market share for auto lenders willing to seize the opportunity.

I recently went with my son to purchase his first car—and experienced firsthand the painful traditional auto buying process. We sat in an office at the dealership, face-to-face with the salesperson, and literally passed a piece of paper back and forth with offers and counter-offers. This was interspersed with what felt like extended stretches of time when the salesperson left the room to discuss the details with a manager. To be honest, I’d have given up if my son hadn’t done his research and already decided that this was the right car for him.

The current auto loan and leasing process leads to disappointing results—for everyone

What makes the traditional process so painful? It’s needlessly slow and completely lacking in transparency. The buyer has to haggle over pricing and terms, and the salesperson must ask the buyer numerous questions to complete the credit application—effort that’s required for every potential customer, even those who may not ultimately meet the lenders’ eligibility requirements. And that’s before insurance products are added to the mix, with little explanation of their benefits.

Using this antiquated process, at the end of the day, everyone’s dissatisfied. The buyer feels like they didn’t get the best deal and leaves the lot sensing that perhaps they should have purchased some or all of the insurance products they were offered. The salesperson has spent a great deal of time and effort to make a single sale, and the auto lender may or may not have been awarded the business.

Reimagining the process so everyone wins

There is a better way. Reimagining the process from the ground up, one auto lender completely transformed the customer and dealer experience based on the idea of “frictionless simplicity.” A new digital journey, driven by data and insights, integrated the loan origination process with the auto buying process and provided key stakeholders with the status of the credit application in real-time.

By moving the credit phase to the beginning of the journey and virtually eliminating manual transactions, the lender was able to both improve the customer journey and speed up the entire process. From the moment the buyer applied for a new auto loan through to the dispersal of funds, it was a frictionless experience, with clear results. The lender saw a 50 percent increase in car loans sales, and in just five months it jumped from fourth to first place in market share.

Four recommendations for auto lenders and lessors

There are numerous ways an auto finance organization could improve the lending process and gain a competitive advantage over its peers. When I begin discussions with lenders and lessors, here’s what I suggest:

1. Start afresh. Envision what a frictionless process might look like from every point of view—that of the buyer, the dealer, and the lender or lessor. Think about how loan origination could be integrated with the shopping experience online, before the buyer sets foot on the lot.

2. Go digital. Minimize or eliminate manual paper processing and offer a mobile app with real-time status updates. This will help you increase efficiency and security, reduce the potential for error, improve the buyer and dealer experiences and reduce back-end costs and the use of incentives.

3. Employ data and insights. Minimize the amount of data that needs to be collected at each decision point. Consider if you could use third-party datasets or access third-party providers to source some of the data you need. The goal is to reduce the number of questions asked of the buyer and remove duplicated effort.

4. Use automation. Identify points on the journey that could be streamlined with the help of artificial intelligence (AI). For instance, for buyers not immediately approved by auto-decisioning, AI could be used to automate the rehash process, enabling considerably quicker approvals.

Greater speed (think minutes not days to close new loans) and transparency are absolutely key for auto finance organizations wanting to improve the customer experience. Auto lenders and lessors able to do this will reap the reward—as preferred providers and with increased market share.

At Accenture, we offer a range of auto finance capabilities to help you go fully digital. If you’d like to discuss how we can help you reimagine the auto loans and leasing journey, you’re welcome to reach out to me directly. Get in touch.