The auto finance payment processing sector is changing rapidly. Customers have a different way of viewing their loans these days, and they have different ways of paying. The payment and billing experiences are now at the heart of customer satisfaction when it comes to loan servicing. Therefore, focusing on this experience is the key to ensuring maximum payment from customers.
Evidence shows it’s possible to improve customer satisfaction by as much as 50 percent simply by enhancing the payment experience. With this in mind, then, here are nine trends in the auto financing industry to be aware of.
Customers Are Now Using 18 Ways to Pay Their Loans
Customers want choices these days. That extends to payment methods for their auto loans. At one time, borrowers expected to pay with a paper check or even cash. Now, they expect to have the option of phone, web, and mobile payments. They want to use their methods of choice, from ACH payments to credit cards. They even want the option of recurring or one-off payments. Catering to those demands through modern auto finance payment processing systems is key to customer satisfaction. It’s also essential to getting paid on time. Since customers prefer to make electronic payments, a web payment portal is the absolute minimum requirement for loan providers today.
Millennials Are Growing in Number
Lenders can only survive if they adapt to generational differences. Millennials are on the increase while other generations are on the decrease. Millennials use eBilling, website payments, and debit cards more than the older generations. Thirty-six percent of Millennials are paying loans with their debit cards. Lenders must address this.
Electronic Loan Statement Delivery Is Becoming Common
Electronic communication is becoming the norm. Interactivity, anywhere access, and personalization rule supreme. For this reason, customers expect interactive and personal messages from auto loan providers. They want electronic bill presentment. They also want one-to-one loan statement messaging via text or e-mail.
Customers Don’t Need Electronic and Paper Statements
Twenty-two percent of customers still receive paper statements, as well as electronic ones. An upgraded eBilling system saves money and satisfies the demands of Millennials.
Recurring Card Payments Are Popular
Recurring payments are on the rise and this is great news for auto finance lenders. Consumers now use recurring payments to pay for everything from Netflix to gym memberships. They simply want to set up a payment and forget about it. Since recurring payments bring the benefit of 50 percent lower loan delinquency rates, this is certainly something worth exploring.
Eighty Percent of Customers Making Payments by Phone Would Prefer Online Payments
Many auto finance providers offer telephone payments but not an online portal. Yet, 80 percent of telephone paying customers would prefer to use an online portal. Since online payments are cheaper and less time-consuming to process, it makes sense to put one in place.
Convenience Is Cheaper
A lack of communication often prevents customers from adopting cheaper payment and billing methods. Telling customers about online options is the best way to guarantee uptake of these cheaper methods. Although marketing costs money, it reduces costs overall when customers make the switch to online payments. Call center payments cost more to process than self-service online ones. Therefore, putting self-service payment processing options in place saves loan providers money. At the same time, it also gives customers what they want. It’s a win/win situation all-around.
BillingTree’s auto finance payment processing solutions are the ideal choice for loan providers. Streamlined, compliant, and cutting edge, they are cost-effective and flexible. They give borrowers and lenders alike what they want and need.