Digital Drives Recovery for Auto Lenders and Dealers

2020 is shaping up to be a far better year than anyone in the auto industry would have predicted in the spring, when dealerships and vehicle manufacturers shut down for several months.

At Auto Finance Summit 2020, held virtually from October 20 to 22, industry leaders explained why. A combination of compassion, tech-driven ingenuity, government relief and pandemic-inspired changes in consumer behavior is powering a pickup in consumer auto buying for many new and used brands. Here are some key takeaways:

Communicate Early and Often with Customers. Auto lenders moved quickly to offer pandemic-related deferrals and other payment options to consumers as shutdowns took hold. Frequent customer communications and flexible payment terms have paid off, with delinquency rates now at pre-pandemic levels.About 30% of Ally Financial’s auto finance customers initially accepted deferrals, for example. But that number has dropped to roughly 1% as cash flow concerns eased due to government COVID-19 payments and reduced travel and other consumer spending, according to Doug Timmerman, Ally’s auto finance president.
Invest in Digital Interactions. The pandemic forced dealers to shift more shopping, sales, financing and closing processes online—much to the delight of consumers. Offering a digital experience after the sale may be even more important, especially to ensure prompt payments and build repeat business.Here’s why: There has been a big jump in car loans that surpass 72 months, according to USAA Bank’s Renee Horne, vice president of consumer lending. With billing and payments constituting a far longer relationship than the actual purchase, consumers will judge their dealers and their auto finance firms based on their billing and payments treatment.
Omnichannel communications and payments options can increase consumer engagement and satisfaction. While more people are looking for mobile and digital convenience, some still prefer to receive and pay bills by mail. Catering to personal preferences goes a long way to making customers feel valued.User-friendly digital communications also reduce operating costs. More customers these days are asking billing and payments questions using email and chat than phone calls, notes Ally’s Timmerman.
Virtual AFS Conference Delivered Great Value. Auto Finance Summit 2020 turned virtual exhibiting and attending into a major advantage. Replays of live sessions let you attend any event you want, at your convenience, no traveling needed. Even more impressive is the networking opportunities, powered by an AI matchmaking system, designed to replace standing in front of exhibit booths and chatting with passersby.Using the platform’s chat capability, I reached out to executives, and once they agreed to a call, the system automatically matched my availability with theirs. This targeted approach streamlines the process for making connections.
The Auto Finance Summit reinforces our collective resilience and ability to adapt. While we suffered a shock to the system from COVID-19, the industry is driving innovation that will deliver long-term benefits.

Interested in improving your auto billing and payments experience? See what Nordis can do for you.

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.