Restrained auto sales growth, millennial reluctance regarding vehicle ownership, and ridesharing are changing demand and increasing competition. Savvy lenders are adapting to these trends with technology while establishing and solidifying dealer relationships to generate lending opportunities.
Two types of technology are especially important for solid dealer relations. No. 1 is integration with dealer management systems, and No. 2 is auto structuring for quick decisioning. Both are available in cloud-based loan origination systems, combining frictionless loan application submission and rapid app responses.
Easily Integrate With DMS to Expand Lending Opportunities
Dealer management systems like CreditLane from CoreLane Technologies, CU Direct, Dealertrack, and RouteOne connect thousands of dealers with lenders. They’re the fast track to increasing application volume. When an LOS is pre-integrated with one or more of these systems, lenders quickly establish connections with thousands of dealers who can bring tens of thousands of lending opportunities.
Accelerate All Steps of the Loan Origination Process
When dealer management systems capture applicant information digitally, they eliminate paperwork that slows the transaction. With a digital transaction, lenders receive quality information to accelerate applicant evaluation and underwriting. Some dealer systems also filter application attributes, matching apps with the lender’s credit policies. As new dealers implement a DMS, their information can be incorporated into the lender’s LOS automatically, further expanding lending opportunity with little effort. Tight integration between the dealer’s system and the lender’s LOS enables real-time updates and streamlines all steps in loan origination.
Auto-Structuring for Rapid Decisioning
Automated structuring uses decision rules and workflow to replace manual application review and deal structuring typically performed by underwriters. Auto-structuring applies rules automatically, evaluating applications that failed credit policies and systematically modifying terms.
The result is a deal structure acceptable to both applicant and lender. Through automation and decision rules, lenders evaluate loan applications quickly and consistently — frequently within seconds of receiving them from the DMS.
Lenders that use auto-decisioning deliver nearly instantaneous responses to applications from dealers. For dealers, a quick response increases the probability of vehicle sales. Auto-structuring also lets lenders offer multiple deal structures, creating additional incentives for vehicle sales and loan opportunities. The ability to offer deal options is a true differentiator compared with lenders who offer no options.
Easy integration with dealer management systems, combined with the ability to rapidly respond to loan applications, helps establish, solidify, and even expand dealer relationships. Dealers benefit from rapid responses and the ability to offer multiple deal options. Lenders get access to thousands of dealers and automation that optimizes loan origination. Technology works to their mutual benefit, helping both succeed in a competitive economic climate.
With more than 20 years in the auto finance industry, Lana Johnson leads the charge to drive innovation as COO at defi SOLUTIONS. defi SOLUTIONS is the Technology Partner of Auto Finance Excellence (AutoFinanceExcellence.org), a sister service of Auto Finance News.