Borrower behavior is changing, particularly when it comes to auto finance. Research suggests that a growing percentage of consumers are securing their car loan before they enter a showroom. While this behavior has been spurred by the pandemic, an increasing number of borrowers say they will apply for auto loans digitally in the future.
This is great news for banks and credit unions, as it can open the door to sought-after new business. Getting this auto loan experience right can create an opportunity to build a relationship spanning across new products and lasting long into the future.
But this isn’t always easy. The typical lending process — that sees a consumer having to visit a branch, fill out significant amounts of paperwork, and then wait weeks for a decision — no longer meets expectations. As well as being cumbersome and costly to lenders, it fails to meet the needs of today’s consumers who increasingly demand a simple, easy digital loan application process and near-instant decisions.
The numbers back this up. In a recent study, 58% of consumers said an auto loan should be able to be completed entirely online — a number that rises to a whopping 70% when limited to responses by Generation Z and Millennials. And 73% of consumers cited the ease of an auto loan application process as a decisive factor when choosing a loan.
The study also found that a lengthy process can lead to loan application abandonment. In fact, 42% of respondents who give up on their loan applications do so because it was taking too long.
It’s time to stand out from the crowd. Lenders can differentiate themselves by offering an end-to-end digital application process that is fast and simple in an effort to meet customer expectations.
How digital car loan solutions can help lenders meet customer expectations
Car loan solutions can help lenders deliver an integrated borrower experience from approval to close.
Completely digital, these solutions accelerate the application process and can improve pull-through as a result. Consumers get the streamlined loan process they are looking for, and lenders can develop relationships, uncover cross-sell opportunities, and reduce overhead.
Achieve even more with Blend
Blend’s end-to-end platform has been built with the needs of today’s lenders in mind. Key features include:
A consistent experience
Blend’s unified platform enables consumers to get the same great experience no matter which channel they choose to apply through. They can start in one channel and seamlessly finish in another. This consistent experience also extends across product lines, so consumers can come to rely on positive, unified interactions with their financial institution.
Blend incorporates up-to-date information from leading valuation providers, helping lenders underwrite loans quickly. Timely underwriting can help lenders expedite time to funding and improve customer experience.
License Plate Lookup
If a consumer has already selected a vehicle, they can enter the license plate number to prompt Blend to pull vehicle details via an Experian integration. Blend will simplify the verification process and pre-fill all relevant fields such as make, model, and trim.
Car shopping integration
Lenders can deliver a true end-to-end experience for customers who haven’t already selected a vehicle by connecting them with preferred local dealerships or Blend’s integrated car buying options.
Because Blend integrates seamlessly with a lender’s LOS, borrowers can receive pre-approvals and rates in a single session. This assurance gives consumers confidence that they will receive the funds they’re looking for, which can reduce the likelihood they look elsewhere.
Blend’s application experience includes an intuitive user interface, responsive design, and data pre-fill, reducing manual work and guiding consumers through to application completion. Teamed with the automation of some steps that usually involve lengthy wait times, this can help drive higher digital conversions.
Lenders can present their customers with personalized offers for a wide range of products. If they accept an offer, they will receive the same reliable experience thanks to the unified nature of Bland’s platform. This consistency can help deepen relationships.
Putting Blend’s car loan solution to work
Financial institutions using Blend are experiencing success — customers can see up to a 79% submission rate on auto loans.
In fact, one Midwest-based bank increased online auto loan application start to submit rates from 20% to 85% with Blend and saw a 10% increase in approval rates. They also experienced a 150% year-over-year increase of auto applications funded in the two months since going live with Blend across all markets.
This demonstrates what can be achieved when lenders implement Blend’s consumer banking software that is built with their needs in mind. These pioneers are fostering deeper, long-term relationships with customers.