It may not be so obvious with the influx of holiday advertisements touting video game systems, pumpkin spice treats and holiday pajamas, but the holiday season is a popular time to purchase a new vehicle. A number of automakers offer special discounts to move inventory before the end of the year. With these, consumers may take advantage of financing packages that are not available at other times of the year. Even with these special offers, most car buyers will finance their purchases, and online tools are changing the way consumers shop for car loans.
The right financing can make the difference between driving away from the dealer in the car of their dreams and not going to a dealership at all. Community banks and credit unions should take notice of this. After all, a recent instamotor.com report noted that 44% of potential car buyers are ready to upgrade their vehicles. Of those looking for a new vehicle, 57% are looking to spend between $20,000 and $40,000. Also, a majority of prospective car buyers will finance their purchases.
Because of this, financial institutions must make the most of the online marketplace. Account holders increasingly look online for financing deals to suit their budgets. Indeed, many follow the traditional route of automaker financing, but one in five prospective car buyers look to online financial institutions.
This practice follows a growing trend since fewer borrowers are going to brick-and-mortar locations for financing options. Additionally, consumers can research and collect information at their own pace while searching online, and they are immune to the pressures of a dealer’s financing department while at home in their pajamas. Financial institutions can expect more consumers (particularly Millennials and Generation Z) to use online research tools. Online resources allow them to obtain more information about APRs and debt-to-income ratios so they can make informed decisions about their next purchase.
Nevertheless, a great deal of business exists in the online marketplace for financial institutions. According to finder.com, banks held a total of $368 billion in car loans as of 2017, while credit unions held $313 billion and automakers held $259 billion. These numbers are expected to increase given the Fed’s appetite for low interest rates and consumers’ appetite for new vehicles. A mordorintelligence.com report indicates that the auto financing market is poised to experience a high rate of growth between 2019 and 2024. With 61% of consumers initiating the car-buying process online, it’s unsurprising that more are searching for car loans in the same space. Indeed, 35% of car buyers currently prefer going to a dealership, but a significant 19.5% prefer an online resource. The digital marketplace could be a transformative arena.
With such potential for growth, financial institutions must form strategic partnerships to reach account holders with targeted mobile marketing campaigns. Mobile marketing is particularly important since consumers did not have the tools to make informed decisions ten years ago. Since the financial marketplace is now more competitive and transparent, knowing how mobile marketing works is critical to future success.
A partnership with Larky is invaluable to community financial institutions. Larky is a nimble, business-minded company that builds engagement programs to help FIs connect with their audience at the right place, delivering relevant messaging at the right time. Larky’s mobile engagement platform directly addresses the need of financial institutions to deepen relationships with new and existing account holders.
Larky is especially adept at establishing geo-notification campaigns at car dealerships to promote a financial institution’s auto loan campaign. Its platform is now embedded into mobile banking apps, which means a financial institution can contact prospective car buyers directly.
To take advantage of the growing online auto financing marketplace, contact Larky today.