In Canada’s fast-moving auto retail sector, the financing process shouldn’t be what’s standing between a buyer and a new set of keys.
Clients today expect a quick, personalized lending experience, said Alexandra Goslar, Senior Director of CIBC Auto Finance, meaning dealerships and lenders must come together to provide a customer-centric approach to financing that gets buyers on their way with no or minimal friction.
“Customers may be in a car dealership for two, three, four hours or more — going through the test drive, looking at different options. The last thing you want when they get to the financing component of the transaction is to have them wait and spend more time in the dealership.”
A NEED FOR SPEED – WITH SAFETY BELTS ON
To get buyers on their way, approval speed is a top priority at CIBC Auto Finance, whether it’s a near-instantaneous auto approval or a manual approval that requires more scrutiny.
“We’re continuing to evolve to improve that speed,” Goslar said. “We’re trying to maximize the pace for the purposes of the client and dealer, while ensuring that we’re protecting all parties’ risk exposure.”
And the importance of a quick turnaround while ensuring due diligence extends beyond the approval stage.
Once a client chooses to go with CIBC Auto Finance and the dealership sends over the paperwork, it’s reviewed at the bank immediately to head off any deficiencies.
"If there are any missing pieces of the package, such as a void cheque or proof-of-income, we’re getting back to the client as quickly as possible to limit the number of touchpoints and smooth out the process for all parties,” Goslar said.
After the funding package has been fully accepted, CIBC Auto Finance also sends the funds to the dealership as quickly as possible, allowing the retailer to wrap up the transaction and get the buyer off the lot in their new car.
It’s all part of the modern retail experience buyers have come to expect.
GETTING PERSONAL
Having the right product for Canada’s diverse set of customers is another key element in today’s lending market. Whether it’s financing products for newcomers that often lack a comprehensive Canadian credit history, or buyers in need of the best rate possible to get into an electric vehicle, CIBC Auto Finance has options to match.
And for dealers building face-to-face relationships with buyers, the ability to provide clients with just the right product at a competitive rate also helps establish long term trust.
“The whole intent is to ensure that when the client leaves the dealership they feel as though they got the best deal that they could,” Goslar said.
With the dealership and lender collaborating to fully educate buyers on details such as the loan amount, term, interest rate and payment frequency, they can ensure there are no surprises for customers down the line, she added.
“This is one of the biggest purchases Canadians will make, only second to a house, so making sure clients understand what you’ve signed up for is critical. At the end of the day, we are here to help make our client’s ambitions a reality.”
GOING DIGITAL
As online sales grow and the first generation who grew up in the digital era enters their prime buying years, the retail sector continues to experience dramatic change.
Auto sales have been more insulated than most retail segments from digital innovation given the key role of dealerships. Buyers are committed to seeing, touching and test driving vehicles in person, but there is a demand for a more streamlined experience.
“Ecommerce companies have reset expectations for customers when it comes to what’s possible digitally, as well as the speed of transactions,” Goslar said. The auto sector, she added, is still about five years behind, but is catching up at a fast rate.
A typical vehicle-buying journey today starts online, and automakers and dealers have adapted by building out their digital offerings. Buyers can easily get acquainted with vehicles, pricing and available inventory virtually, but when it comes to starting the financing process in earnest, Goslar said, “a lot of the financing journey is still very traditional right now, in that you have to be in person in the dealership for majority of steps.”
CIBC Auto Finance is advancing development on a suite of digital tools to provide buyers with the ability to complete the purchase process online.
The option to e-sign documents from anywhere is one key solution that will simplify how buyers and retailers wrap up transactions.
For instance, after doing an in-person test drive, a prospective customer often leaves a dealership to mull over the purchase. Traditionally, the buyer would need to return to the store once they’ve made a decision, but the use of e-signatures gives the customer the option to wrap up the deal online. It’s one part of creating a “frictionless experience” for buyers who are more comfortable checking the final boxes from afar, Goslar said.
E-signature technology is widely used in other sectors, including real estate, but remains a work in progress in automotive.
The Canadian Automobile Dealers Association (CADA) and Canadian Financing and Leasing Association (CFLA) say allowing the industry to shift to e-signatures from traditional “wet” signatures will let the auto sector join the modern era. The organizations are pushing regulators to make changes that will allow the process to be permitted across Canada, as CIBC and other stakeholders fine-tune the technology for use in auto retail.
PREVENTING FRAUD
Along with allowing transactions to take place online, digital tools are also solving some of the troublesome new challenges the auto sector is facing.
Identity fraud is a growing problem at car dealerships across Canada that can leave the retailer, lender and/or customers on the hook for significant losses.
CIBC Auto Finance offers dealership education tools that teach retailers to detect fraudsters as part of their know-your-customer processes. It also has a growing number of fraud detection solutions in place to help protect all stakeholders.
A new digital ID verification tool will add a further layer of security, both online and at dealerships, Goslar said.
“As the whole industry looks at providing an end-to-end experience, the ability for us to do ID verification and know-your-client in a non-face-to-face channel is critical.”
The ID verification tool will couple with e-signatures to provide a safe and easy process for completing sales online, as well as play an important role heading off the growing number of fraud attempts at dealerships by ensuring customer ID checks go through the same scrutiny they would face online.
“Even in a traditional buying journey at the dealership digital ID verification will ensure the individual at the dealership is truly who they say they are, which ultimately protects the dealer as well as that client.”
With growing demand for digital tools and& personalized experiences, partnering with dealerships to streamline the purchasing process is imperative to ensuring the positive client experience they’ve come to expect.
