The $4.7 Billon Dollar Opportunity

Download File

Are Mismatched Payment Quotes Hurting Sales and Profits?

Dealers report they are losing sales because of mismatches between initial payment quotes and final lender terms, but if this gap is solved, the vast majority of dealers surveyed predict gross profits and F&I penetration would significantly increase.

Executive Summary

Recently, eLEND Solutions analyzed thousands of consumer credit applications to compare initial finance terms, offered to consumers by auto dealers, with over 100 auto lenders decisions received for the same customers. The findings showed that the average monthly payment, interest rate and down payment of lender loan decisions were significantly higher than the averages of the initial terms quotes to consumers – with monthly payments coming in at $32 higher for new and $36 for used.

To validate these findings, and to investigate the real-world ramifications of mismatched quotes and lender terms, eLEND Solutions fielded an online survey among U.S. dealerships and F&I Industry professionals. While the survey results underscored the negative impact that the disconnects between initial quoted payment terms and lender fundable contract terms can have on sales and gross profits, they also revealed significant opportunity.

The survey solidly validated the credit application analysis: over 80% of respondents agreed that lender loan decisions are usually higher than the initial quotes. The vast majority also reported that 60+% of credit applications submitted to lenders do not receive “Approved” credit decisions.

So, it was no surprise that respondents reported that, as a result, many dealership vehicle sales are re-penciled– up to 30%, or more, , with front-end gross profit reduced in order to resolve this friction.

The result? 93% say vehicle sales and finance penetration are adversely impacted as a consequence. But today’s loss represents tomorrow’s significant opportunity for auto dealers.

Consider: the majority of dealers surveyed estimated that penetration could increase by 11%, or more, if consumers were quoted qualified payment terms matched to lender fundable contract terms before getting to the F&I office.

How does this translate into real dollar impact to vehicle sales, front and back-end gross profit and F&I penetrations? Using data from the survey and consumer credit application analysis, eLEND Solutions estimates that lost sales revenue opportunity averages $237,000 per dealership per year, and lost F&I revenue opportunities average $277,632, equating to an average lost profit opportunity of over $500K per dealer per year. That is an estimated $4.7 billion annual lost opportunity for franchise auto dealers.

How can this opportunity be realized? There are solid clues in the 87% who say they have noticed an increase in the number of lenders who have stopped providing standard rate-sheet bulletins. These bulletins provide FICO Credit Score tier as the single attribute to determine base loan pricing, but the majority of respondents say that over half of lenders no longer provide this information. Without it, dealers are flying blind in their efforts to quote qualified payment terms during sales negotiation.

Lenders’ move to AI-based loan decisions is one of the key culprits here, but if those dynamic pricing models moved forward in the sales negotiation process perhaps, as indicated by survey respondents, through a finance pre-desking tool, the mismatch gap could end.

And, as the survey data estimates show, that could amount to an average $514,000 annual dealership opportunity.

Key Survey Data Highlights

Finance Approval Decisions Higher than Initial Quotes

Survey respondents resoundingly agreed with the analysis eLEND conducted, across thousands of credit applications and over a hundred lenders, that the average lender finance approval decision returned monthly payments that were $32, or more, higher for new and $36, or more, higher for used than the initial amounts dealers had quoted to their customers.

Over 80% surveyed said average lender monthly payments were higher than initial dealer quotes
image

Majority of Credit Applications Not Approved

With so many reporting that lender terms come in much higher per month than the customer had initially been quoted, it makes sense that they also reported that 60% of credit applications submitted to auto lenders do not receive credit approval decisions, meaning most customers are receiving initial information that could undermine the customer experience.

82% agree that only 40% of credit applications receive credit approval decisions.
image

Reworked Deals, Reduced Front End Gross Profit, Lost Sales

Not surprisingly, this lack of alignment between initial quote and lender terms means an avalanche of reworked deals for dealers, with 88% saying deals have to be re-desked because initial payment quotes do not match the lender’s final approval terms. Of these, three in five surveyed say that 30%, or more, of new vehicle sales have to be reworked – a deep source of friction for dealership customers.

Up to 30+% of new vehicle sales reworked because of mismatched quotes and approved payment terms
image

To smooth over these disconnects, and ensure the sale, 90% say dealers are giving away significant front-end gross profit.

Front-end gross profit is reduced 11-20% or more of the time to resolve friction between quotes and lender decisions
image

And, when it comes to used vehicles, 87% say that higher lender final decision payments mean front end gross profit is reduced, with well over half lowering it by $300 or more.

Front-end gross profit for used vehicles is reduced by $300 or more due to higher lender payments
image

Unfortunately, that friction often can’t be resolved, and the sale is not made, as evidenced by the 93% who say it results in lost sales. Using 5% lost annual sales opportunity with average gross profit per vehicle, eLEND estimates that those lost sales gross could add up to a whopping $237,000 per dealership, per year.

image

Lost Time/Lost Sales in F&I

Consumer dissatisfaction in the vehicle sales process is usually traced to how long a consumer spends in F&I – often a result of the poor alignment between initial quote and lender terms, which can add, say the majority, 16 to 30 extra minutes to the sales process. Every minute lost is CSI goodwill and finance sales gold wasted, time that could have been spent upselling F&I products.

Majority say 16 to 30+ minutes extra is spent resolving payment quote/lender terms discrepancies.
image

And, predictably, this has an impact on finance penetration, say 93% of respondents.

The Opportunity

However, if consumers were quoted qualified payment terms matched to lender fundable contract terms, before getting to the F&I office, respondents estimate F&I penetration would increase by an average of about 15%, which translates into an estimated $277 thousand opportunity, on average, per dealership – if the issue is solved.

78% estimate that finance penetration could increase by 11%, or more, if initial payment quotes matched lender decisions before getting to the F&I office.
image

Lender Standard Rate Sheets Do a Disappearing Act

At the crux of the challenges caused by the loan quote-to-terms disconnect reported in this survey is the increase in the number of lenders who no longer provide auto dealers with standard rate-sheet bulletins – the traditional bible for determining initial payment quotes. 87% report seeing an increase in lenders who don’t provide bulletins, with the majority saying that over half no longer offer them. Without this information, auto dealers are essentially guessing.

This lender disappearing act can be tied directly to lender adoption of AI-based pricing. But, if these proprietary AI-based loan programs are integrated into the front of the dealership’s vehicle sales process, the quote-to-terms discrepancies would do their own disappearing act.

This is probably why 88% of survey respondents agree that a finance desking tool that puts the customer in the right vehicle with the right deal structure – matched instantly to a waterfall of qualifying lender programs prior to F&I handoff – would add value.

It will take industry collaboration to move to a finance first, not last, process, but if it does, a $4.7 billion opportunity can be realized.

image

Methodology

Survey Methodology: Nearly 150 automotive dealers, allied F&I industry personnel and auto lenders across the U.S. participated in this online survey which was fielded by eLEND Solutions in August 2025.

About eLEND Solutions

eLEND Solutions™ (formerly DealerCentric®), is an automotive FinTech company providing a vendor neutral, API-based middleware solution for true end-to-end connected retailing. Our solution bridges the gap between shopping and buying – delivering transactable, lender-matched payment options and funding scenarios at the point-of-sale, online and in-store. The platform specializes in hybrid credit, identity verification, and ‘pre-desking’ finance solutions. By changing when and how the shopper is introduced to realistic payment information and dealership financing options, the combination of technology and data enables the dealer and the customer to come together much faster – and more profitably.

Download File