Vehicle finance (cars, motorcycles, boats, and recreational vehicles) finance has not escaped disruption from the trends of digitization, digital competition, and customer expectations. Both the vehicle product and financing supply chains are being digitized, componentized, and uncoupled from prior business relationships, technology systems, and loan product/pricing models to throw existing vehicle finance business models into question.

Consumer supply and demand are stagnant in many markets and product segments due to restricted vehicle computer chip supplies, rising interesting rates, and higher new and used vehicle prices. In this business and technology environment. All types of vehicle lenders (banks, credit unions, and captive finance companies in retail and indirect channels) have to manage a trifecta of internal business growth goals, competition, technology limitations, and loan profitability requirements.

This report evaluates how technology and competition are driving changes in how vehicle finance companies need to sell, price, underwrite, retain, and cross-sell auto loan customers. The true implication of these trends is that lenders need technology that improves product pricing, speed of processing and decisioning, and lowers processing costs to create a more modern, digital first vehicle finance business. This requires a long-term digital transformation strategy to sustain competitive differentiation.