The need for speed: a 15-minute car pickup with customer-direct lending

As of July 2019, an impressive 82% of US households held Amazon Prime memberships. A vast proportion of the population has become accustomed to next-day shipping and one-click confirmations for purchases and subscriptions. Customers of other companies also demand a fast, smooth purchasing experience in every transaction.

These new expectations mean that auto purchases taking hours or days to complete just aren’t going to cut it – and now more than ever, businesses will be competing in service ease and speed to make sales.

There are a few visionary car sellers taking customer service to new levels; companies such as CarMax, for example, offer curbside car pick up to buyers, meaning customers don’t have to take time out of their routine to make a purchase. Unfortunately, these innovators are relatively few and far between. Most customers face a different experience altogether.

Traditional lending: what’s the hold-up?

  1. Inefficient negotiation between buyers, sellers, and lenders

After homes, car purchases are some of the most significant purchases most customers will ever make – it’s no surprise that they want options that fit their financial situation. It’s not uncommon for a customer to request an adjustment of their contract terms, such as reducing their monthly payment amount to make it more budget-friendly.

With these changes, there’s an inevitable period of waiting for review and confirmation from the lender. Limited working hours, waiting for responses and the requirement of a physical signature can cause further delay.

  1. Paperwork frustrations: managing documentation and verification

Nobody in the car buying process looks forward to managing documents and records. However, it’s a critical business process for remaining compliant and profitable. Furthermore, since the average customer isn’t buying a car very often, it’s simply human nature for some to forget their paperwork or ID when making a purchase.

As a result, buyers may have to be asked several times for additional documentation like proof of address or income, taking up your employees’ time with basic, but necessary, admin-chasing and customer contact tasks.

  1. Reluctance to visit dealerships and lenders in person

When you combine the issues above with customer expectations of convenience, asking buyers to visit in person is becoming less viable. 80% of car buyers use third-party websites to find information about new and used cars for sale, according to Cox Automotive. Further, 83% of car buyers want to do some or all of the car buying process online. Like most physical stores, dealerships have also been hit hard by concerns over COVID-19.

These all contribute to the fact that an ever-increasing share of the vehicle purchasing experience has moved online. All manufacturers have, at some point during the early lockdown period in Q2 2020, reverted to digital-only sales simply due to no customers visiting dealerships directly.

Even beforehand, there were signs that the traditional model of showroom salespeople was becoming outdated and inconvenient for the modern buyer.

Ideals of customer direct lending

In terms of businesses looking at innovative approaches to changing customer preferences, companies including TrueCar and Tesla provide “buy from home” and “direct drop” options. This choice allows buyers to complete all of their paperwork remotely and gives the option to have their vehicle delivered directly to them. Likewise, Volvo offer drop-off and pick-up of cars and loaner cars to customers who need maintenance on their vehicle, all managed and trackable via a mobile app.

Some companies, such as CarMax, are providing easy, no-commitment-required access to financing calculators for customer convenience; beyond entering a zip code, it’s entirely in the customer’s hands as to whether they continue with the next steps of the application process. These options give the customer freedom to compare and inform on their options before feeling any pressure to go ahead with the purchase.

This all said, on the other side of the sales transaction, dealers want buyers to come to them so that they have a direct opportunity to upsell related products, such as warranties. Furthermore, as car entertainment systems and technology become more complex and competitive, the opportunity to test out these capabilities in person also remains attractive to buyers with particular criteria in their searches.

What happens next?

Implementing a digital solution that appeals to customers, car dealers, and lenders is undoubtedly a challenge. On a basic level, you need an intuitive user interface that keeps up with the likes of Amazon users’ online expectations; there’s no surer way to lose an online sale than with immediate technical frustrations.

Consistency is also important: some brands have sophisticated “build-your-own” websites with product and pricing filters conveniently letting customers view consolidated options in one place. They are then let down as buyers need to be physically present in the lender’s branch to sign paperwork to complete the transaction.

To keep attracting a new generation of customers and eventually reach that 15-minute sale closure, you need to evaluate what you currently have in place and consider:

  • Prioritizing the “from home” experience: make your website and apps easy to use from home – your website needs to guide customers clearly through each step, be straightforward and easy to use
  • A seamless customer experience, online to offline: a slow website can undermine all the goodwill you try to create with a simple and straightforward online experience. Consider setting an internal goal for online-originated sales. Can you close the transaction in 60 minutes or less? What safeguards are in place to support customers if they need assistance during the process?
  • Empower your customer and highlight convenience: several companies are already popularising curbside delivery. To compete, find ways to make new car sales fast and easy; for example, let customers choose their car delivery or pickup day.

The path to a 15-minute car pickup

A recent industry poll from MX found that 86% of customers interact most often with their financial institution online. However, the same research found that a majority of customers expect that the future of banking includes both online and branch banking options.

Essentially, research tells us that there is still some appetite for an in-branch experience, but there’s definitely an increased focus on and expectation for fast, convenient services that can be initiated online. With customers reluctant to visit dealerships in person, it’s more important than ever to make sure you can keep up with new demands.

To avoid the dreaded ‘come-back-next-week’ and get any new contract admin completed quickly, you’ll want to look at technologies that can accelerate both the branch-based and digital channel of your sales process.

Streamline your underwriting decisions, optimize your customer service and keep branch interactions focused and concise – you’ll be closing deals in no time at all.

Check-in with White Clarke Group today to find out how we could help you digitize your customer direct lending platform.


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