LAS VEGAS – Twenty years ago, four automaker captive-financing units, despite their competitive nature, joined forces to create something altogether innovative: RouteOne.
The company created by Ford Credit, Toyota Financial Services, Chrysler Financial and GMAC has grown over the years and advanced technologically.
But its purpose remains the same. Its middleman digital platform links 1,500+ lenders with thousands of auto dealers seeking financing on behalf of their car-buying customers.
RouteOne assistance extends to credit applications, regulatory compliance, contract management, aftermarket presentation, and digital retail.
“We are the hub in a hub-and-spoke model, with auto dealers using our platform to connect to lenders. Dealers rely on us as stewards of their data,” Chief Revenue Officer Jeff Belanger tells Wards while discussing the latest trends and technology in vehicle financing.
Those include e-contracting, automated decision-making systems and digital menus that dealership F&I managers use to sell aftermarket products.
E-contracting has been around for about 15 years, and had seen consistent, steady growth. But when the pandemic hit, there was a very big spike in adoption in a very short amount of time.
“E-contracting has taken root in the last few years” as digital auto retailing has gained in popularity, Belanger (pictured, below left) says on the show floor of the National Automobile Dealers Assn. convention and expo here.
“Interest was gradual early on, but we’ve seen hockey-stick growth of e-contracting during the pandemic” when consumers either couldn’t (because of lockdown mandates in several states) or wouldn’t visit a dealership. So, they turned to the internet to buy vehicles.
RouteOne supports 200+ financial sources with e-contracting capabilities. They’ve booked 24 million e-contracts which cover vehicle-purchase agreements.
The company touts e-contracting as the foundation for a modern consumer experience that streamlines financing, increases efficiencies and reduces contracts in transit.
Part of that modern experience is digitizing deal documents allowing consumers to sign more deal documents electronically, and hence send all that data to the finance source electronically to get deals funded faster. A menu that is fully integrated to eContracting can do just that. F&I menus once were only on paper. When they went digital, things got interesting. They are now available on computer tablets, making them more configurable.
Customized menus educate customers on protection products such as extended-service agreements and gap insurance, offering flexibility to best suit customer needs and individual F&I manager presentation styles.
Interactive tablet menus use survey analysis to help buyers self-identify risks and then receive specific protection-product recommendations.
F&I menu use traditionally was only at dealerships, but now F&I managers can text or email remote menus that allow consumers to review offerings at their convenience.
“Consumers can self-educate as a preliminary step to meeting the F&I manager at the dealership,” Belanger says. The premise is that customers familiar with products are more likely to buy those products.
Vehicle financing is quicker today thanks to modern technology which includes automated decision-making.
At first, automated decisions were limited to rejecting loans based on the information contained in the credit application. Lenders didn’t trust the then-nascent systems to approve a loan. Now they do.
“We see a lot more automated approvals,” Belanger says. “It’s really grown. It has become very standard.”
Ironically, whereas lenders once didn’t trust the systems to grant a loan, now the thinking is that automated approvals using algorithms and artificial intelligence are preferable to manual determinations that are subject to human errors or misjudgments.
“A lot of lenders use automated decision-making to reduce risk,” Belanger says. “There’s no risk of, say, preferential treatment when considering a loan application.”
Moreover, systems can send back an assortment of loan structures from which the dealer may choose.
And automated lending is fast. It helps cut buyer time spent at a dealership, a major factor in today’s all-important customer experience.
Steve Finlay is a retired Wards senior editor. He can be reached at [email protected].