Buying a new car is a time of excitement for your clients. They saved up the deposit and are ready to look at the models you have available. The one thing they don’t want? The stress of waiting to see if they’re approved for a loan. This is precisely why it’s important that your auto dealership financing software is up to date and ready to deal with your customers financing needs now, not later.
What is auto dealer financing software?
You competitors are moving fast. So, you’ll have to move even quicker to ensure those sales. One way to optimize your processes and get ahead of the competition is with auto dealer financing software. With these tools on hand, you can improve your internal loan processes and attract more customers, but what is auto dealer finance software?
Auto dealer finance software is a piece of kit that handles all your lending needs—from loan origination to risk management to underwriting, servicing, and more. A modern dealership should come equipped with some type of software. After all, your clients don’t want to run around to various banks trying to secure a loan. That’s why every modern auto dealership needs to be on the ball when it comes to financing software.
5 Steps to a better auto lending platform for your dealership
Lagging behind or think your current system needs to improve? Let’s take a look at the 5 steps — yes, only 5 — you need to take to set your digital transformation off on the right foot.
Step 1: Gather your list of auto lending platform requirements
We know from experience that every client is different. What works for your competitor will not necessarily work for you. So, analyze your customer base and find out which parts you really need. That said, there are some must-have essentials that you need to include:
- Onboarding platform
- Online application submission
- KYC functionality
- Back-office tools
- Payment integration
You might also consider including loan scoring software and collection tools, which down the line, will make your life a whole lot easier by automating these vital processes.
Step 2: Custom vs. out-of-the-box
Both of these have their plusses and minuses when it comes to doing business. However, which is best for your lending software is up to you. When deciding always consider your needs now and in the future; otherwise, you could run into exponential costs. For example, if you are a reasonably small auto dealership, custom-built software may be an unnecessary expense. Whereas for large-scale enterprises who need tons of customization, this is the only way to go.
Step 3: Know what you need to pay attention to
If the world of auto dealer finance software is new to you, not to worry, let’s get to grips with the basics of what you need to pay attention to. Even if this is not your first time dealing with financing software, a refresher never hurts. So, what do you need to look for in a good auto lending platform? Consider the following points:
- Will you need a customized landing page for your brand?
- How can you optimize your back-office to make it as usable as possible for your employees?
- Which automation tools do you need for data entry (client applications, loan management software, etc.)?
- How many different types of car loan models do you need to create?
- What type of data will you be dealing with? This will define your ability to import, report, and integrate.
- What are your future plans for scaling and customization?
With this knowledge you should be able to better inform your software provider (or internal department) of your needs, so they can better design a solution.
Step 4: In-house or outsource?
Automated Lending Software: Custom vs. Out-of-the-BoxIt is quite rare that auto dealership financing software is developed in-house, however, it is a possibility that some companies consider. This is especially true if they are affiliated with a large-scale parent company. For the majority, designing an auto lending platform is outsourced. That’s why the next step is to know which questions to ask your outsourcing provider. For example:
- What is the estimated time to market?
- Which features are included in the tariff plan? Some companies may charge separately for every element meaning your auto loan origination system is charged separately from your auto loan servicing software. For others, it’s included as one charge. Be sure to check this.
- Do you need car dealer lease software? This format is gaining popularity alongside the traditional loan software tools.
- What is the approximate cost of customization and what features are included in this? Check for smartphone apps, automatic scoring, customizations for websites, etc.
- Are there any additional payments related to the number of loan officers?
- Which APIs are included, and which are extra?
- What about on-going technical support? As it usually happens, all software comes with some nuances, so it’s good to know what’s included and what will be charged in addition to this.
Step 5: Done and dusted! How to get your employees onboard?
Once you’ve completed all the technical stuff, it’s time to start getting your team ready for the transformation that’s coming. After all, employee buy-in is the key to success. To do this, work closely with your vendor to ensure you have all the necessary details, and discuss how you can best train your employees to work with the new tools. If your vendor has been in the market a while, they’ll know the best tricks and tips for explaining the new tools to your team and getting their buy-in from day one.
Why do you need new auto dealer finance software anyway?
We’ve all heard the saying, “if it’s not broken, don’t fix it.” And while this is a great way to be economical and non-wasteful in everyday life, the same does not apply to software solutions. Such tools are constantly advancing with upgrades not only keeping you ahead of the competition but simply making work a whole lot easier for your business. So that’s why when it comes to auto dealer financing software, the best bet is, “fix it before it breaks” and upgrade now. Still on the fence about investing time, energy, and money into digital transformation for your auto dealership? Let’s take a look at the facts.
Auto lending platform digital transformation statistics
Increasing operational efficiency tops the list when it comes to business priorities in digital transformation. Smoother lending processes fall right into this category as it can help you take the edge against your competitors.
Spending on digital transformation across the globe is set to hit $3.4 trillion dollars in the next four years. Meaning that it is something that companies are heavily investing into and worth the attention.
According to a report by Autotrader, car buyers have a limited about of energy they are willing to spend on buying a car. Current processes resulted in 60% of car buyers giving up. For younger buyers, this increased to 75%. Make sure buying is a seamless process with optimising lending tools to processes everything right in your showroom.
76% of car buyers use the internet when shopping for a car. Taking up 14.2 hours online compared to 7.9 hours offline. This means your clients are likely spending a lot of time looking and your site and considering your tools. To help them make their decision, creating an ideal web-based platform that could take them through browsing to purchase—including securing financing—could make them more likely to choose your dealership over others.
Omnichannel retail in particular for the auto industry is a growing trend. Almost 45% of buyers would like to do so online or at least complete part of their journey there. That’s why it’s important your digital transformation strategy takes into account omnichannel as the new normal.
Make auto dealership financing software your next innovation
As technology advances, there is no time like the present to start the journey to upgrading your tools. While it may seem daunting at first, when the right company by your side, you’ll wonder how you ever did with your new auto lending platform. HES is one company that offer software tools for auto dealerships. With years of experience in the market, we know the ins and outs of everything from designing your auto loan origination system to auto loan servicing software bringing together stunning auto loan servicing software that meets your needs—and everything in between. HES offers an estimated 2-week time-to-market meaning the time from project initiation to realization can be as short as half a month.