Lenders face several key challenges when working with dealers, which can significantly slow down the funding process and affect loan performance.
“Shotgunning Deals”:
The practice of dealers submitting multiple applications to various lenders simultaneously. This can lead to increased adverse selection and higher delinquency rates due to non-performing loans.
Incomplete or Unverified Stipulations “STIPS”:
A delay caused when required documents from dealers are incomplete, incorrect, or unverifiable, resulting in longer funding times.
Rejected Contracts:
Contracts returned to dealers due to missing or non-compliant stipulations. These further delay the funding process and create friction between lenders and dealers.
Overdue Titles:
A failure to receive titles promptly creates legal and compliance risks, affecting the lender’s ability to perfect its lien on the asset.
Insurance Verification Delays:
Contracts returned to dealers due to missing or non-compliant stipulations. These further delay the funding process and create friction between lenders and dealers.
To overcome these challenges, lenders seek to work with dealers who provide:
• Quality, Complete Deals:
Clean, compliant deals from the start, reducing the need for follow-ups or contract rejections.
• Well-Performing Loans:
Loans that are more likely to perform well over time, minimizing defaults and delinquencies.
• Efficient Look-to-Book Ratios:
A higher ratio of approved deals that are ultimately funded, maximizing the lender’s return on each application.
• Timely Title Delivery:
Titles that are processed on time, preventing any lien issues.
• Dealers Who Support Customers:
Dealers that prioritize customer satisfaction, such as fixing vehicles post-sale, which improves loan performance and reduces early defaults.
• Long-Term, Loyal Dealer Relationships:
Establishing trust with dealers who consistently send quality performing deals to the lender.
ENTIRE DEALER
ONBOARDING PROCESS
Imagine improving the quality of deals from dealers, speeding up the funding process-which dealers appreciate and will incentivize them to send you more business-while eliminating overdue title issues.
This translates into:
• Increased loan originations
• Better-performing loans
• Higher earnings for your business
By addressing these challenges head-on, you can enhance your relationship with dealers and optimize your auto lending operations for sustained success.
OTTOMOTO® replaces obsolete paper-based processes with modern digital solutions for:
