Shifting into Second: The Future of Driving Auto Loans (Part 1)
For the auto industry, the Road to Purchase has shifted radically. Today, most shoppers take several months to go from the initial decision to buy a car, to the ultimate action of buying one, taking full advantage of research tools and other resources throughout their digital journey, much more heavily than ever seen in the past. They not only visit manufacturer and dealer sites, but also rely heavily on third party websites to validate information, using social media to share and rate personal experiences. And, they consume this content across multiple devices, as tablet and mobile usage continues to rise. Because of this new empowerment, shoppers have higher expectations than ever before in terms of response times, communication methods and service levels, especially as we consider the younger generation of buyers who have only recently entered the market. While their buying behavior is still evolving, Generation Y already represents more than 20% of all retail sales and is predicted to represent more than 40% of all vehicle purchases by 2020. We are always connected, always consuming information and always being influenced as we shop. This presents implications for marketers and lenders alike.
According to a recent cnbc.com article entitled, “How Millennials are Reshaping Car Buying,” the way millennials now research vehicle buying options and dealers is changing the process for everyone. The article notes that “Going into the car buying process, millennials are notably less likely to have any idea what sort of vehicle they want. But by the time they walk into a showroom, they’re far more likely to have a specific model and brand in mind…A full 95 percent of millennials said they went online during at least part of the buying process.”
Access to this extraordinary volume of online data has pushed many consumers to the point of information overload. The dizzying amount of available information, compounded by an equally overwhelming number of new choices to be made, is leaving many buyers feeling not quite equal to the task of sorting through it effectively. In addition, many traditional third party websites are now moving to a lead generation model, potentially introducing competitive risks to credit unions’ lending efforts. While having these resources available at their fingertips on an array of mobile devices has provided a more streamlined shopping experience for many, from an informational gathering perspective, a growing number of today’s buyers are seeking a simpler approach; having someone they can trust to help walk them through the vehicle buying process. This need is driving the next phase of the auto buying experience – the fast-rising appeal of concierge-style buying services.
(Up next: A personalized approach to the member buying experience)