Car Dealers Struggle With Long Transactions, Sketchy Credit Info

Surveyed car dealers say a protracted car-buying process remains an issue for many consumers, particularly when it comes to time spent in the F&I office.

Of 135 dealers participating in an Equifax survey, 45% said it takes them 90 minutes to two hours to complete a deal. Thirty-one percent said it takes between two and two-and-a-half hours.

The survey says dealers may struggle in providing digital solutions to customers.

While 84% of dealers said they offer appointment setting online, only 27% indicated they can facilitate the entire deal online.

Conversely, 87% of dealers acknowledge customers would prefer the ability to complete a deal online.

The online poll aimed to better understand current trends in retail transactions, credit applications, vehicle financing and fraud.

“There remains a distinctive gap in what dealers are currently offering and what car shoppers want when it comes to the realities of digital retailing,” says Jenn Reid, credit tracker Equifax’s vice president-automotive strategy and marketing.

Jenn Reid (002)

Meanwhile, nearly nine of 10 dealers said they grapple with unidentifiable information in credit applications, saying they daily handle one to two credit applications like that.

Dealers also remain largely focused on collecting information stated on the credit application, such as income (89%) and employment (84%).

Less than half of dealers (42%) say they currently collect alternate forms of data, such as phone-bill payment histories. Equifax says today’s additional non-traditional credit data can help identify appropriate financing for individuals.

Fraud remains a challenge. The survey says 76% of dealers handle between one to three fraudulent transactions each month. Nineteen percent say they see three to five sketchy transactions monthly.

Reid says: “Fraud comes in many forms within an automotive transaction and remains a significant concern for many dealers, illustrating the deep need for advanced digital technologies that today offer instant verification of identity, residence and other forms of alternative data.”