Whether you are a Bank, Credit Union, P2P lender or direct Auto Financing company, by now hopefully you have transitioned to the latest technologies and can provide most if not all of your process online: application, doc process, and final decision-making.
Ok, so let’s review your customer’s journey. Your marketing operation brings the customers, who then go through the online process, and end up with a pre-approved auto loan in their hands. While it might seem like your job is over, it’s not. What is your ultimate goal? Your goal is to fund the approved auto loan. Therefore, it is imperative to continue the customer’s journey to reach your ultimate goal of funding the loan. If you stop at the pre-approved auto loan, there are pitfalls ahead…
What are the pitfalls ?
- Customer has a higher chance of switching to another lender.
In an instance of a “pre-approved only” or secured auto loan, the process is not complete yet so there is a chance that your customer might get sold a loan from another lender. The longer the distance from where you drop off your customer to where he/she actually purchases a vehicle, the higher the chance of your loan being switched out.
- Bad user experience
Generally customers prefer simplicity and they don’t want to jump through hoops. That’s why we love bundled deals, and shopping at supermarkets since that’s where we can find everything we need, all in one place. There is also less to think about, it’s more convenient and it’s easy to follow one common process.
- Customers might change their mind
It might take some time for customers to find a vehicle they want, remember they are on their own. During that time they might decide not to go through with the loan and get cold feet. This is why you want to minimize the amount of time they spend looking for a car.
But don’t worry there are ways to solve the above mentioned problems. Read on to find out what they are…
Solution 1 : Write a car shopping guide
This solution is the most basic one and it involves writing up a guide on your website about where to shop for vehicles and how to do it. This is obviously better then just leaving a customer without any direction, but still doesn’t solve all the pitfalls mentioned.
- Better then nothing, provides basic guidance
- Cheap to implement
- Still leaves a customer mostly to their own devices
- Not so great user experience
- Customer loan still has a high chance of getting switched out
Solution 2 : Car buying advisors
This solution counts on having trained personnel ready to help out your customers either via phone or chat. Your customer reps are generally leading them throughout the car shopping process. This involves figuring out the type of car the customer wants, finding the matching cars at the local dealerships and arranging the test drives.
- Good for customers that want their hand held through out the whole process
- Minimizes getting the loan switched at the dealership by avoiding unfriendly dealers
- Requires skilled car shopping advisors / might be hard recruiting them
- Costly operation: Personnel, phone minutes
- Not for customers who don’t like talking to people on the phone
- Less visual, longer and more tedious process for the customer
Solution 3 : Partnering with an existing car shopping website
This solution involves partnering with an existing car shopping website. Generally you would link from your website to the car shopping portal. Some portals have affiliate programs where you might earn additional revenue by sending your customers. Others might even offer a more branded experience, but in most cases you do not get much control over what happens after you send your customers their way.
- It gives you some influence over where your customers go next. You could avoid totally unfriendly websites.
- Possibility to generate additional revenue
- User experience flow is interrupted since customer is re-directed off of your website
- Chance of a partner website also offering car loans and switching out your customer to another loan
- You do not have control over which dealerships your customers are sent to
Shameless plug: If you are looking at the solution 3 and going the route of only partnering with a car shopping website I would like to recommend checking out www.carqualifier.com which is one of the properties of AutoCode. Carqualifier is a Car Shopping portal geared towards customers who are looking to finance their vehicles. Visit for more info at: www.autocode.com
Solution 4 : Your own branded online car shopping portal
With this solution you are offering a fully branded Car Shopping Experience that’s part of your existing website, which offers the highest level of user experience for your customers.
Customers stay on your website and are able to browse local car inventory. Since you are building a custom solution you have full control over everything, but it is very expensive to build (requires developers, dealer inventory, data licensing) and very costly to maintain.
- You own the technology
- You control every aspect of the platform
- You decide which dealers to feature and remove
- Since it’s part of your website it offers a seamless, high quality user experience
- Very expensive to build, hire developers, hosting , vendor cost… etc ( think in millions of $$$$ )
- Takes time to build and be production ready: at least a year
- Costly to maintain
- Acquire and Manage dealer inventory (Takes time and resources to keep the inventory updated)
- Acquire all of the stock media and vehicle specs
Solution 5 : Lease a private labeled online car shopping portal
This solution is very similar to the previous one. It is still part of your website and very customizable but it’s much more affordable and it takes much less time to get started. Best of all is that you do not have to spend time managing it yourself, which when it comes to running a Car Shopping Portal can take a lot of time. Usually this option is fully managed by the provider which includes technical support, updating dealer inventory, taking care of the web hosting and scaling it when needed.
- Relatively turnkey – fast startup time: 2-3 weeks
- You control most important aspects of the platform
- You decide which dealers to feature and remove
- Since it’s part of your website, it offers a high level user experience
- Relatively affordable to start up and maintain
- Don’t need to manage all the vendors: Dealers, content, data …etc.
- Not as much customization as having your own
Shameless plug: If you are looking to run your own Car Shopping Portal but without all the hassle of managing and hosting it, AutoCode offers a full “Private Labeled Car Shopping SAAS” Platform that is fully lender integrated. You get all the benefits of having your own without all of the headaches. Visit for more info at: http://www.autocode.com
Hopefully, these solutions have shed some light on the options available to improving your customer journey and increasing your profits by improving the ratio of auto loans closed.