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Pete MacInnis
If the online-to-offline segue is seamless enough, “The experience is better for the customer and more profitable for the dealer,” says eLEND CEO Pete MacInnis.

Does Automotive Digital Retailing Promise More Than It Can Deliver?

A new study cites dealer concerns about dubious information that can mislead online car shoppers and kill deals.

A new survey says most auto dealers are keen on digital retailing, but many of them express concerns about customer-experience disconnects.

Among cited frets are online tools that sometimes provide inaccurate or misleading quoted payment terms to internet users shopping for vehicles.

Nearly 90% of dealers cite that as a turnoff, according to the eLEND study that asked if digital retailing promises more than it can deliver.

So does it? “It’s not fully baked yet,” eLEND CEO Pete MacInnis tells Wards.

Although digital retailing through its various definitions often is touted as a brass ring of the future, the eLEND dealer survey indicates a speed bump is the inaccuracy of many standalone digital retailing tools or platforms – specifically credit calculators that give bad payment information to consumers.

Such miscues can spark consumer skepticism, paint inaccurate credit profiles and ultimately result in dealers having to unwind deals.

Of dealer survey respondents, 87% say it’s common for payment-estimator tools to give inaccurate or unrealistic payment expectations. That can kill deals, or hurt them anyway.

“Because most of these tools return unqualified payment quotes – unmatched to the customer’s credit profile, a specific vehicle and, crucially, any of the dealer’s lender programs – they establish an unrealistic payment expectation,” MacInnis says.

A recent J.D. Power report says nearly half of auto loan customers shopped for vehicle financing options before visiting the dealership. “Digital retailing needs to catch up with both dealer and consumer expectations,” MacInnis says.

His 15-year-old company pioneered online credit applications. It now also provides an in-store financing process. “Think of it as a digital deal jacket,” he says.

Steps in a car deal include finding the desired vehicle, negotiating the price, valuing the trade-in and determining financing terms based on a consumer’s creditworthiness, he says. “With the latter, our goal is to bring financing to the front end of the process, whether it is online on in-store.”

The eLEND platform essentially does the credit application work for the dealership.

MacInnis cites this scenario: “Customers fill out online credit applications, then go to the store. The dealership scans their driver’s licenses. The credit information they provided online comes up. The financing can be ready when they come back from the test drive.”

The eLEND scanner also works as a crime fighter, he says. “We’ve detected many fraudulent driver’s licenses. They are used to steal cars from dealerships. You can buy a fake license for a couple of hundred bucks online. It looks real to the eye.”

MacInnis describes today’s digital automotive retailing as an enhanced lead. “It is a better presentation to customers. They’re learning more about what they want to buy, then go to the store more informed and prepared to buy. It helps consumers make better-informed decisions.

“But there is still a difference between that and actually buying the car. They are still going to the store to buy, which makes it important for all their online work to be passed along so they’re not starting all over again at the dealership.”

If the online-to-offline segue is seamless enough, “The experience is better for customers and more profitable for dealers,” he says.

The eLEND survey says despite some of those accuracy concerns, most dealers like digital retailing. Nearly 70% agree “powering up” with technology can simplify the process and boost profits.

Nearly 60% of dealers surveyed who use digital retailing tools believe average profitability is equal to or higher than non-digital retailing transactions.

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