Four Ways to Get Auto Loan/Lease Billing and Payments Right with Younger Buyers

We all know that buyers across industries are skewing younger, and those changing demographics impact how you sell, finance and communicate. Helping companies manage critical communications is my business, and it doesn’t get much more critical than financing a big-ticket item like an auto, truck or SUV.

Buying a vehicle is one of the largest purchases for many consumers, with the average new vehicle loan in the final quarter of 2017 reaching a record high of $31,099, according to Experian. So, community bankers and dealer financing and servicing executives, along with fintech leaders, had plenty to talk about at Auto Finance Summit 18, which I attended in Las Vegas.

Millennials, aged 21 through 34, were a hot topic. They are taking out new auto loans at a 21 percent higher rate than Gen X borrowers did at that age, according to a study by TransUnion. And they’re getting longer loans, too — seven years compared to what used to be the more standard five-year loan for autos.

This is an important development because a longer-term loan helps consumers better manage cashflow so they can keep up with payments. It also lengthens the time to build a relationship. After all, the stakes for getting the relationship right are high because doing so means that those big-ticket customers return to the same manufacturer, dealer and/or lender.

One session called “Customizing Servicing Techniques for Different Borrower Demographics” explored ways to appeal to younger car buyers. I’ve got four more that will help cement relationships and create lifetime customers:

Obtain a customer’s billing communications and payment preferences right out of the gate, during onboarding for the loan. Customers under 35 often want digital bills and other documents and two-way communication, such as payment reminders, by text. At the same time, don’t “overtech” it by using all possible channels with the same customer. They’ll tune you out or get annoyed, so getting the preference is key.

All customer-facing communications with lending, billing and payments must have a mobile component.  E-bills, service reminders and digital payment portals must be mobile-optimized using responsive design.  Offer text messaging as a communication preference and use for payment alerts or service updates.

Mobile wallets give more communications and payment options. We recently introduced ExpressoWallet, a digital statement alternative that uploads into Apple Wallet and Google Wallet, apps already installed on most smartphones.  Loan balance and payoff amounts can be presented in real-time, with convenient customer connection links and push notification that alert borrowers that their payment is due or has been received.

The servicing companies play a key role in making the car ownership experience a favorable one. Keep it positive by introducing dynamic content and personalizing billing statements with important information the individual buyer needs and keep the connection with the dealer and manufacturer with service reminders, cross sell offers or other opportunities.

Making these changes won’t just attract younger buyers. Car buyers of all ages are looking for more convenience and choice, too.

About the Author

Bryan joined Nordis Technologies in 2016 to manage and grow the company’s already-large vacation ownership client base. He also is responsible for business development and market expansion in the healthcare and financial services markets. Before joining Nordis, Bryan spent more than 21 years with Interval International, a leading global provider of vacation ownership services. Bryan graduated from Northwestern University with a bachelor of science in political science. 

Bryan Ten Broek
Vice President – Business Development