Auto retailers pursue the digital buying journey

Industry expertise

By: Bill Jones, Head of Truist Dealer Retail Service and CEO/President of Regional Acceptance Corporation

With the Manheim index over 200 (up 38% over last year),1 auto inventories at all-time lows, and loan performance holding up well, these unprecedented conditions have dealers looking for business opportunities as they work to meet customers where they are in today’s digitized buying journey.

Our industry has been undergoing digital transformation for years. But it’s a journey that’s never done. Dealers will continue to evolve their technology capabilities and choose strong fintech providers that enable the digital purchasing journey. Auto retailers will be better positioned to serve customers the way they want to be served—and at the same time gain more control over the selling and financing process.

With the pandemic serving as a catalyst, the digital buying journey has come closer to becoming a reality. COVID-19 revealed the powerful consumer appetite for digital buying, financing, and purchasing from the sofa. With cars moving off the lot and margins at high levels over the past year, dealers of all sizes have been able to invest in further building out the digital buying experience.

As we continue our efforts to help dealers respond to changing market dynamics, there are a few foundational capabilities that our team is actively expanding. These solutions are ones we firmly believe will create the most value for dealers in your efforts to expedite the sales and contracting process and manage credit risk, operate efficiently, and drive profitability.

Dealers integrating with emerging fintechs – One path to the digital journey is through automotive fintech solutions that work with, not around, dealers to create efficiency for both buyers and sellers in the buying process. Automotive shopping sites continue to evolve their platforms—typically through APIs (application programing interfaces)—to seamlessly connect dealers with partners who can help them deliver the full digital buying experience, from shopping to closing. We are integrating with fintechs who are working with our dealer clients.

Prequalification of buyers to enable the earliest stages of the sales process – We are investing in capabilities that help dealers identify qualified buyers who come to the table pre-screened and with financing options in hand. Dealers will be able to manage risk, especially with sub-prime purchasers, and have more visibility during the earliest stages of the sales process. Buyers will get more control over financing and will be able to model various financing scenarios.

E-contracting capabilities for your buyers across the credit risk spectrum – While the industry has made great strides in speeding up the contracting process, it remains one of the most time-consuming aspects of the business. Technologies that make the process faster and more seamless will benefit buyers and dealers alike. We continue to expand functionality on this front.

We’re operating in a market that is shifting with changes in wages, credit scores, supply chain impacts, technology, and more. At current new and used car pricing levels, affordability is an issue for higher risk customers, and it remains to be seen whether labor market strength, wage growth, and the continued softening of demand will resolve this issue.

While we might not have seen the last of pandemic-driven changes, and the market is hardly settled, we’re excited about what the future holds for dealers. We’ll continue to expand our capabilities, drive process automation, and work with key fintechs to deliver a full spectrum, best-in-class solution that will position our dealership clients for whatever comes next.

Keep up with the digital buying transformation.

Talk to your Truist Dealer Services relationship manager about how Truist can help you build out your digital buying journey.