Online Auto Lending Opening Doors for Banks

Now more than 100 years old, the U.S. auto financing market is an immense area of consumer borrowing. For decades, auto financing was dominated by dealer-originated loans provided by auto manufacturers' financing arms and nonbank financial companies. But in recent years the retail auto market has undergone a demonstrable transformation, due primarily to consumers' preference for online shopping, a trend accelerated by the COVID-19 pandemic. The result has been the advent of 100% digitized, no-contact auto shopping and purchasing, which has served to invite change and risk, and has opened the door for banks and credit unions to seize a larger share of the market. 

This report undertakes a market examination through the lens of Javelin's Digital Lending Maturity Path. This report identifies examples of platforms that have attained what Javelin defines as “Stage 4 maturity,” meaning fully integrated digital lending. The chief enabler in this market of digital lending maturity is the integration between online auto marketplaces and lenders.

Key questions discussed in this report:

• Why should auto lending matter to financial institutions?
• What are the traditional and emerging auto lending models?
• Who are the key players in auto lending?
• What defines digital maturity in auto lending?
   

Companies Mentioned:

Ally, American Credit Acceptance, AutoFi, CapitalOne, CarMax, CarsDirect, Carvana, Chrysler, Federal Reserve, Ford, General Motors, Honda, Navy Federal Credit Union, Nissan, RoadLoans.com, Shift, Toyota, TrueCar, United Auto Credit, Vroom, Westlake