After the purchase of a home, buying a car is the second-largest purchase most people make. Consumers don’t buy a new vehicle on a whim. Rather, they research, test drive, compare prices, and look for the best financing options.
According to credit data analyst company Experian, 85% of new vehicles and 55% of used vehicles are paid for with financing. These financed vehicle purchases account for up to 40% of gross profits for the average car dealership.
But the loan application process can be intimidating for vehicle shoppers. Online documents and data processing should make this easier. Yet, Forrester data suggests that online banking applications and digital transactions have an astronomical abandonment rate of 97.5%.
If securing a favorable auto loan seems too complex or time-consuming, shoppers may delay their vehicle purchase, or forgo it entirely.
To help consumers overcome the barriers to auto financing and boost vehicle sales, car dealerships can consider the benefits of video communications for sales and support processes.
The Barriers to Auto Loan Application Completion
Forty percent of car buyers are most frustrated with the paperwork required for financing—and understandably so.
There a myriad of factors to prepare and research in order to apply for an auto loan. Car shoppers must decide which lenders to research. They also must determine whether they should get a quote through pre-qualification or pre-approval.
Once a car shopper has a couple of loan quotes, they need to compare loan terms, APR, taxes and fees. For used vehicles, there are more considerations. For example, a vehicle with more than 100,000 miles may not be eligible for financing at all.
If a shopper decides to go ahead with a loan application, they will need to provide a number of documents including:
- Proof of identity (ID, passport, PAN)
- Proof of address
- Proof of age
- Proof of income
- Proof of car insurance
- Car documents
Much of this paperwork can be submitted and processed online. Even so, if the process is too tedious or complex, the sale may be lost. According to a Forrester report, a number of factors impact online transaction completion rates:
- The number of keystrokes required
- The number of questions asked
- The difficulty of finding the information required
- Mobile support and responsive user design
- Whether or not documents can be submitted easily online
As the effort required to complete the transaction increases, the probability of abandonment does as well.
Video Communications for Auto Sales
Owing to the complexity of auto loan applications, many dealerships are successful in offering car shoppers their in-house financing options.
But salespeople still need to gain the trust of clients and guide them through the loan process in a simple way that builds trust in their purchase decision.
Auto deal bundles combined with financing costs are confusing. Financing may cover the cost of the car, warranties, vehicle maintenance, and the cost of the loan itself. Confusion and complexity cause consumers to hesitate, especially in the case of a digital transaction.
With face-to-face video communications, employees can build rapport and trust with shoppers. In fact, 77% of financial services professionals say that video banking increases sales close rate.
In addition, with screen sharing, car salespeople and loan officers can walk applicants through loan applications step-by-step and explain the specific benefits of different financing options.
Vidyo Can Help
When it comes to a large purchase like buying a car, shoppers want a personalized experience that addresses all of their concerns.
By seamlessly integrating video chat into the loan application processes, salespeople and financial service professionals can build trust and help to simplify the complex process of financing a car.
Vidyo is a trusted provider of embedded and real-time video communications for sales and banking operations. By connecting with customers using VidyoEngage, you can show vehicles and walk customers through finance application process,s whether they are at your dealership or shopping from home.
With Vidyo APIs and SDKs, video communications can easily be built into existing or new applications and web portals.
Thanks to adaptive video layering and call routing technology, Vidyo users can deliver high-quality experiences to customers regardless of the network connection or endpoint device. In addition, Vidyo’s solutions are compatible with document cameras and signature pads so all loan application processes can be completed online.
Over 450 financial service organizations use Vidyo to better connect employees and customers—and drive business results. Learn how your team can boost sales with high-quality video communications.
To learn how embedded video can benefit your organization, visit us online today.