Car buyers love to finance their vehicles. In the first quarter of 2021, more than 80% of cars purchased in the United States were financed.
This should be great news for companies involved in the car buying and financing process, but not everyone is happy.
Because as consumers embrace digital technology and online shopping in their daily shopping, they increasingly expect a seamless Amazon-like experience from automakers. They don’t want to haggle or “talk to the manager”. And for them, sitting in the showroom or dealership lobby for hours waiting for loan approvals and document preparation is an irritating waste of time.
In a recent Wolters Kluwer industry survey, automotive industry professionals acknowledge these challenges. Some 74% of respondents say paper-based funding processes take more than 30 minutes. More than 60% believe that a quarter to nearly half of all transactions have errors due to manual processes.
Drive change with eSignature and eVault solutions
To deliver the kind of customer experience that attracts, satisfies and retains consumers, automakers must transform their processes by deploying digital technology.
eContracting solutions help companies move from manual face-to-face processes to less cumbersome and more compliant digital processes. Electronic signature tools enable compliant digital signatures. Electronic vault technology enables businesses to house documents in digital storage, where they can be shared with retailers, lenders, consumers, and aftermarket lending businesses.
By enabling businesses to stay digital throughout their end-to-end financing processes, these advanced technologies can enable faster and more accurate loan origination. Simpler and more efficient loan processes improve the convenience and overall experience of customer interactions. And, unsurprisingly, these benefits can increase sales.
Automotive companies that embrace digital solutions can streamline and improve the automotive finance process. In the Wolters Kluwer study, 76% of respondents say the solutions allow them to transact in just 10-20 minutes. It’s a huge improvement that consumers will love.
Unfortunately, most automotive industry leaders have yet to embrace digital financing solutions. According to the survey results, many decision makers say they haven’t found the right solution or are unsure of the value the technology can bring.
Of those that have deployed digital tools, most companies are just getting started. Only about a quarter of respondents say they use technology in more than half of their business.
Even fewer companies have deployed eVault solutions, which ensure regulatory compliance and legal enforceability of digital asset-backed securities. Less than half of respondents said they use an eVault solution to provide proof that a digitally signed document is the original, unaltered document.
Embark on digital transformation
What is the lesson to be learned from this data? Some automakers may feel they have nothing to lose by waiting for digital solutions to be more widely deployed. They couldn’t be more wrong.
The percentage of manual finance and insurance processes will continue to decline as businesses digitally transform. The COVID-19 pandemic has accelerated this shift, and like the new, more convenient business models adopted by the retail and consumer product sectors, consumers will expect automakers to get on board. In fact, the Wolters Kluwer Auto Finance Digital Transformation Index shows an almost 80% increase in digital transactions since the first quarter of 2021.
To deploy digital solutions quickly and with minimal cost and downtime, major automakers are connecting to third-party platforms and cloud services. These technology providers can help automakers digitize more of their processes faster and deeper. This is especially true for niche players who only operate effectively when they can effectively share reliable and standardized data and documents with other players in the automotive ecosystem.
A shared digital cloud platform provides a single, secure and tightly controlled environment that companies can use to manage all processes and transfers throughout the funding journey. It can ensure the integrity of all documents, data and connection points from start to finish.
By using a digital cloud platform, businesses can sign and manage contracts digitally, eliminating paper and the associated inefficiencies and risks. Companies can manage contracts with strict security, control and speed. And they can use trusted, reliable, low-touch governance features to boost compliance control and efficiency.
Companies that delay this transition, effectively refusing to add value for their customers, risk losing business and being squeezed out of the market by competitors. In a slowing economy, where new and used car sales are lower than expected, responding to customer interest by offering a fully digital car shopping experience is a smart move, one that is certainly worth considering. celebrated.