What auto dealers are saying about their lender networks
According to auto dealers who spoke on a panel at Origence’s Lending Tech Live 2024, auto dealers are looking to simplify their processes.
The panel of dealers included auto financing experts Cody Done, director of retail lending at Ken Garff Automotive, which has 70 locations across nine states; Jason White, vice president of Schomp Automotive Group located in Colorado; and Kent Ketterling, executive manager at Maita Automotive Group located in California. These dealers shared insights on the state of the auto dealership and their need to optimize their lender network.
In a panel discussion, they shared their challenges with everything from navigating fluctuating interest rates to managing the complexities of customer financing needs and varying process intricacies. As a result, they explained their focus to streamline processes and select lenders who simplify their workflow. This strategic shift aims to enhance efficiency and improve the customer experience, but it has credit unions wondering how this strategy impacts them and what to do about it.
Understanding the auto lender networks
Traditionally, dealerships have maintained relationships with a wide array of lenders to provide their customers with as many financing options as possible. This extensive network ensures competitive rates and favorable terms for customers. However, the increasing complexity and administrative burden of managing numerous lender relationships has led dealers to reevaluate their network.
The panel of dealers confirmed that multiple lender partnerships require extensive time and resources for communication, loan decisioning, and coordination. Additionally, varying processes and technologies among lenders can lead to inefficiencies and inconsistencies. In an era where speed and simplicity are paramount, these challenges have prompted a strategic pivot towards more streamlined operations.
For a dealer, speed isn’t just about creating a better customer experience; it’s also about improving their margins through speed of funding. Dealers strategically prioritize their lenders by decisioning and funding times.
Why dealers choose credit unions
Dealers have found credit unions to be valuable strategic partners. Credit unions are historically known for competitive rates and terms, but it’s the personal service and lending flexibility that dealers say matters most to them.
Year after year, our dealer panelists highlight lending consistency as a major factor in their continued partnership with credit unions. Unlike some traditional lenders who may pull in and out of the market, credit unions have proven to be consistent and reliable partners. This stability allows dealers to better plan and manage their finance offerings.
However, despite all these benefits, dealers are still selecting lender partners based on their speed to decision and fund loans. Dealers will no longer manage lender programs that do not complement their sales and finance process. As a solution, the panel explained how turning to technology has simplified their processes and connects them with credit unions on a broader scale.
A game changer for dealers
Technology continues to be a key strategy for dealers looking to connect with credit unions. The dealer panel was clear: they are not looking to add numerous one-off lender agreements but looking to technology solutions to bring them credit union partnerships. Using specialized technology, dealers have access to a single application platform with a national network of credit unions. The credit union-centric application portal enables dealers to secure credit union financing for their customers with best-in-class speed to decisions and funding.
Indirect lending technology can seamlessly integrate with the dealer’s dealership management systems (DMS) or customer management systems (CRM), reducing the need for duplicate entry and allowing for a smooth flow of information, which reduces the potential for errors or delays.
Furthermore, technology can provide credit unions with the tools needed for auto decisioning and digital funding—keeping credit unions relevant as lenders. This immediacy is crucial in today’s market, where customers expect quick and straightforward transactions. By reducing the time spent on financing, dealers can continue to improve the overall customer experience.
The future of lender partnerships
More than 20,000 dealers across the nation currently partner with indirect lending technology to provide them with the best credit union lending experience and lender partners. As the market evolves, CUDL technology will continue to position credit union lenders as strategic partners for dealers.
To find out more about indirect lending solutions through Origence, click here.
