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How will a Post Dealer Reserve World Impact the Sales and Finance Process?

How will a Post Dealer Reserve World Impact the Sales and Finance Process?. Pete MacInnis. CFPB to Hold Auto Lenders Accountable for Illegal Discriminatory Markup.

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How will a Post Dealer Reserve World Impact the Sales and Finance Process?

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  1. How will a Post Dealer Reserve WorldImpact the Sales and Finance Process? Pete MacInnis

  2. CFPB to Hold Auto Lenders Accountable for Illegal Discriminatory Markup CFPB examiners found that these indirect auto lenders had discretionary pricing policies that resulted in discrimination against African-American, Hispanic, and Asian and Pacific Islander borrowers. As a result, these borrowers paid more for their auto loans than similarly situated white borrowers. The CFPB states that discriminatory markups on auto loans may result in tens of millions of dollars in consumer harm each year! CFPB’s September 17, 2014 proposed rule estimates that about 38 auto finance companies would be subject to this new oversight. These companies originate around 90 percent of nonbank auto loans and leases. The CFPB is determined to eliminate dealer finance participation and wants the auto industry to move to a flat fee finance model!

  3. Bill to Rescind CFPB Auto ‘Guidance’ Gains Support in Congress September 17, 2014

  4. Opponents of CFPB have been mostly focused on the potential financial impact to dealers and they have paid very little attention to the potential impact on the sales and finance process. Sales and Finance Process National Auto Dealer Survey Results September 2014

  5. Sales and Finance Process National Auto Dealer Survey Results • 80% of Dealers responded that their current sales/finance process takes 2 hours or longer. • 40% reported a sales/finance process takes 3 hours or longer. • 70% of dealers responded that the ideal end-to-end process should take 2 hours or less.

  6. Sales and Finance Process National Auto Dealer Survey Results • 75% of dealers begin the financing process after the test drive. 30% not until after the negotiation and the customer is in F&I. • 8 out 10 dealers reported that the current sales and finance process has a significant opportunity for improvement.

  7. Sales and Finance Process National Auto Dealer Survey Results • 90% of dealers agreed that a quick, efficient sales/financing process leads to greater customer satisfaction and results in higher CSI scores.  • 86% of dealers agreed that negotiation and the F&I process are steps in the purchase process that customers dislike the most. 

  8. Sales and Finance Process National Auto Dealer Survey Results • 45% of dealers reported that capturing more detailed information, earlier in the process was the biggest opportunity for their dealership to streamline the sales & financing process.

  9. Time is MoneyAutomotive News Article Series • “Gone in 60 Minutes?” • It is closer than you think! • Time correlates directly to a positive or negative consumer experience.

  10. Consumers Want to Move More of the Car Buying Process Online Transparency E-commerce will force transparency to become a 2 way street, swinging theinformation pendulum advantage back towards the dealer. 15

  11. THE EVOLUTION OF AUTOMOTIVE FINANCE IN A POST DEALER RESERVE WORLD ! 90’s 2000 80’s 2015 16

  12. System Integration Auto Finance Platforms will be seamlessly integrated with most vendor systems involved in the sales and finance supply chain. System Integration 17

  13. IN 2015 Finance Will Move to the Front of the Vehicle Purchase Process Online Credit apps will match the buyer and their credit profile with the right car and the right loan programs at the very front of the buying process. – all before the customer has even started the test drive.

  14. Moving finance to the front of the sales process will trim the average deal time by 30-60 minutes Interactive credit applications will provide direct, upfront access to dealership financing sources and real near-final terms of approval from multiple lenders at the very front of the car buying process. 15

  15. Credit Powered Desk Tools Technology will enhance communication between sales and finance departments at the point of sale. Dealer desktools will display a waterfall of lender programs, from basic credit filtering to fully automated loan decisions. Lender credit decision results will be displayed instantly to the dealer and/or consumer at the point of sale. 17

  16. QUESTIONS / ANSWERS / OPEN DISCUSSION 21

  17. Share an important takeaway you received from this session using hashtag #DD17 for a chance to win an iPad. Contact Info Pete MacInnis eLEND Solutions Chief Executive Officer pete@elendsolutions.com Full Name: Company: Job Title : Email: 24

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