Most Dealers Unprepared for CFPB Regulations, eLEND Finds
May 06, 2015
MISSION VIEJO, Calif. — Eighty percent of dealers expect Consumer Financial Protection Bureau (CFPB) regulations will be implemented in the near future, according to a new survey conducted by eLEND Solutions. However, the survey also revealed that less than half (40%) of dealers have plans in place to meet these new regulations, which could replace dealer participation with mark-up thresholds or a flat-fee model.
Dealers also indicate that they are ready to deliver a sales and financing process that begins online — the vast majority (95%) agree that the industry should strive to create one, easy streamlined buying experience by starting both the sales and financing process online. In fact, eight in ten dealers agree that a connected online and in-store experience will help sell more cars faster and lead to greater customer satisfaction, and nearly 70% of dealerships say this is a goal for their dealership.
“This survey underscores that the time has come for a better sales and financing process, whether or not the CFPB has its way,” said Pete MacInnis, CEO of eLEND Solutions. “The days of the four-hour, very disconnected, sales/financing process is poised to end as dealerships look to move more and more of the sales and financing process online — and connect it end-to-end.”
Establishing a connected buying experience that starts sales and finance together online is an approach that helps dealers modify current negotiation/finance purchase contract processes that are likely to be required as a result of the probable CFPB changes to dealer participation policies.
The survey also found that dealers think it’s highly (35%) or somewhat (45%) likely that CFPB regulations will be implemented, and 34% think the impact of CFPB regulations will be positive, while another 31% think impact will be minor or none at all.
When it comes to online sales, 71% of surveyed dealers strongly agree that “creating one easy, streamlined buying experience — by starting sales and finance together online — is a worthwhile goal.” And 76% of dealers stated that “connecting the online and offline shopping experiences to create one seamless, unified buying process could lead to accelerated sales, faster retail transaction times and greater customer satisfaction.”
But a full one-third of dealers say they are reluctant to put F&I online because traditional dealership processes insist financing be arranged exclusively in store.
In a previous eLEND Solutions survey, 80% of dealers said that their sales and finance process averaged two hours or more, and 40% reported that theirs lasted three hours or more — while a whopping 82% of dealers said the ideal end-to-end process should take two hours or less. Yet, according to a recent Autotrader.com survey, buyer satisfaction starts to decline after 90 minutes at the dealership. The same study showed that 66% of consumers would be much more likely to buy from a dealership that offers their preferred experience.