Digitalization of the Entire Car Financing Process across America

Amidst increasing number of auto loan delinquencies, lenders are now sceptical regarding lending money to borrowers. Car loan delinquency ratio is back to 2008 levels especially among borrowers that already had fair or poor credit scores when they got those loans. Lenders use SAW (Stability, Ability and Willingness) frameworks for analyzing borrower’s capacity to repay loan. Different data points are used for measuring applicant’s financial stability and capacity but these are not enough to know whether borrower has the willingness for repaying auto loan dues on time. Most of the loan dealers rely on people past debt repayment history for assessing risks involved in lending money.

Today new auto finance companies are making use of innovative techniques including cognitive and social media analytics to predict borrowers’ willingness for repaying car loan debts. This has changed the manner in which risks were predicted previously. Besides, it is also true that people are changing cars after every few years because of advancement in automobile technology. And some individuals have even started getting cars on lease with predictable monthly payments rather than get them on finance. For example, Porsche has already started providing subscriptions that allow users to get access to all its vehicle models and that too for unlimited mileage.

Know where the automobile industry is actually headed

Propelled by advancement in automobile technology and digitalization of financial services, car buyers are now using online processes for shopping instant auto loans. Consequently, purchase and home delivery of cars has now become commonplace. As a result, dealerships have become redundant and taken over by showrooms. Probable car buyers can take advantage of test drives for new car models and use on-spot financing alternatives. This has gone a long way in boosting new car sales. Tesla is known to have started such a trend and it has already become popular throughout Europe.

Innovations in the field of automobile financing

Majority of the car finance companies in USA want to ensure that customer experience is enhanced and operational efficiency optimized. And such propositions can only be realized with digitalization of services and building newer business models. The following information highlights the same.

  1. An increasing number of borrowers are exploring car financing options through mobile apps these days. This is because lenders are maintaining online presence and even vehicle information can be easily accessed by using the fast internet processes to your advantage. Consequently, you have the chance to get behind the wheels within a span of few hours. And it is possible to make an informed decision on your car purchase by fixing free consultation with a competent local auto loan advisor.

  2. Gone are the days when rental car customers were required to give personal details for getting cars on lease. The process has now been reversed by some websites that provide information about special deals on car leases. Mobile users can access the details within minutes by browsing websites owned and managed by rental car companies instantly as well as book rental cars of their choice.

  3. One of the ways to finance new cars is to avail dealership financing loans. You can explore variety of alternatives including those offered by lending arms of car manufacturers. However, this way you might not be able to get used cars financed but there is little need to worry. The segment may be targeted by lenders that specialize in providing subprime car loan finances.

There are number of new companies that have entered the fray for providing auto financing loans as a result of which the car loan market is abuzz with competition. This enables borrowers to secure deals that are easy to manage as well as sustain regardless of the status of their credit histories. The automobile industry intends to sell millions of car units this year and new players in the car financing market have a role to play. Nevertheless, there is greater scope for further advancement in auto loan providing techniques. Lenders need to use advanced processes such as biometrics, e-contracts as well as state-of-the-art machinery that ensures high degree of operational efficiency and guarantee rich customer experience.  After all, there is a need to revolutionary’s car sales as well as auto loan financing mechanisms.  It will ensure better results!

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Article Author Details

Layla Flinn

Layla Flinn is a Sydney based writer and researcher, a regular contributor at Smooth Decorator blog. She writes about décor, gardening, recycling, ecology and business. She thinks all of these topics fall under the self-improvement category. She believes in the power of sharing ideas and communicating via the internet to achieve betterment.