Keep it simple for dealers and customers, and be flexible.
Those are key lessons CarFinance.com has learned from tinkering with its online origination system for direct-to-consumer auto loans and refinancing over the last four years, John Koehler, vice president of product and partner management, said in a recent webinar hosted by the Center for Auto Finance Excellence called, “Going Paperless: Tips & Tools for Every Stage of the Digital Lending Process.”
Replays of the webinar are available here.
“The easier you make it, the better,” Koehler said. CarFinance.com is part of a Flagship Credit Corp. The parent company’s indirect lending arm is Flagship Credit Acceptance.
CarFinance.com is active in 48 states and the District of Columbia. The online lender launched the latest update of its online process in the fourth quarter of 2014, the most “paperless” version yet, Koehler said.
Applicants can apply online, get approval emails with a link to a Doc Center where they can upload documents to clear stipulations, and get an actual contract back instead of an “estimated” amount, according to Koehler’s presentation. Those steps account for much of the “keep it simple” part, from the customer’s point of view.
The flexible part is, CarFinance.com continues to accept documents in other forms, like emails, faxes or snail-mail. “Consumers, broadly, want to do business with innovative companies that are ahead of the curve – but you must have a process today that allows for older, paper-based processes too,” Koehler said.
For dealers, keeping it simple means in part that CarFinance.com avoids requiring dealerships to buy dedicated hardware, he said. “Electronic contracting offerings from major technology providers have relied on special hardware and offered limited opportunity for use, preventing dealers – and lenders – from updating the business,” he said.
Koehler said refinancing accounts for most of CarFinance.com’s volume, about 72%. On the direct-loan side, he said dealerships probably convert 40% of CarFinance.com customers out of CarFinance.com loans and into traditional indirect loans. However, he said CarFinance.com competes for dealer business on the basis of convenience versus other lenders, especially other direct lenders.
“The dealer is able to close a deal with the customer, without the customer having to take the paperwork to a local bank or a credit union,” he said. “And it is not some estimated amount … Dealers also know they’re going to get paid within 24 hours.”
Auto Finance News and Fiserv launched the Center for Auto Finance Excellence in 2013, to share best practices and actionable advice with auto finance professionals.Like This Post