Is AI Adversely Impacting the Car Buying Process? (Part 1)
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Is AI Adversely Impacting the Car Buying Process?
In a new survey of dealers and lenders, eLEND took a look at what is behind the inaccurate payments that, the
vast majority say, are having an adverse impact on the buying experience. This infographic reveals the dual
culprits – AI-based pricing and a reduction in lender transparency – and their impact on mis-matched desked deal and final lender decisions.
The Ripple Effect of Inaccurate Payment Quotes
86% of lenders/dealers acknowledge that inaccuracies in online digital retailing payment quotes are
having an adverse impact on buying experiences.
This is not surprising, given that the majority of dealers/lenders (76%) say initial digital retail payment quotes match final lender decisions less than half the time- leading to confusion and
distrust among buyers.
The result? The desked deal matches final lender decisions less than 50% of the time, exacerbating friction in the process.
What is causing this? Lenders and Dealers say AI and a lack of lender transparency.
The reliance on AI-powered pricing, with its more nuanced view of a borrower’s financial situation, has led to a significant disconnect, with 90% of survey respondents citing it as a contributor to payment quote inaccuracies.
And nearly as many confirm a reduction in lenders providing rate-sheet pricing bulletins, which is what dealers rely on to estimate the customer’s payment – leading to misaligned deals.
All of which creates significant disconnects in the auto finance process….
But, report dealers and lenders, there is even more to the challenges at the intersection
of the lender, the dealer, the consumer – and the deal. Find out more in Part 2 of this
series which includes more data on why today’s online payment quotes are anything
but ‘penny perfect,’ including reliance on consumer-provided credit scores, mistimed
lender/desking decisions as well as where there is consensus on how this can be solved.
Source: 2023 survey of over 350 auto dealerships across the U.S., fielded by eLEND Solutions