What is Instant Decisioning, and how does it work?

You may have heard the term “instant decisioning.” On the surface, the name says it all: “instant” = no wait, “decisioning” = a true answer. In the context of automotive retail, you can tell it’s referring to finance. But often that’s as far as the understanding goes. We’ve spent the last 6 years at AutoFi developing this technology, so let’s shed some light on what “instant decisioning” really entails.

Speed is key
Business today is about speed. We’ve all been conditioned to expect instant answers as we shop online. Anything that breaks that process, like a “call for price” listing, risks sending that shopper to another site. Automotive retail continues to offer up many barriers to speed—some intentional, others systemic. Intentional barriers include making customers come into the showroom to get numbers, or not presenting finance products until the very end in the “box.” Systemic barriers refer to antiquated platforms (DMS, inventory, desking, etc.) that can be difficult to overcome.

Finance is the most important part of buying a vehicle
Researching and selecting the right vehicle is a big part of the purchase process. But without the financing piece, no metal can swap hands. Shoppers know this, and more than ever, they’re looking into finance options on their own.

According to the J.D. Power 2021 U.S. Consumer Financing Satisfaction Study

  • 42% of mass market brand shoppers researched automotive finance options prior to purchasing/leasing a vehicle.
  • That number jumped to 52% for luxury brands.
  • 60% of those customers then applied for pre-approval

Maybe those customers submit an application to their own bank and get pre-approved for a certain amount. That’s a good start, but they don’t know the actual rate or payment on a certain vehicle yet. Or maybe they submit a credit application through a dealer’s website. In that case, the dealer has to pick up the application, run it through their bank partners, review the decisions, and only then first get back to the customer. Neither of these are ideal, or fast.  

Barriers must be removed
Instant decisioning automates that process and presents actionable offers to the customer—within seconds, catching shoppers in the moment, completely systematically.

We’ve solved this by bringing the decision engine into the cloud. In 60 seconds or less, our platform runs that credit application through each lender’s rules engine. We return the decision (approved, declined, or pending w/stipulations) and display customer offers based on the banks selected by the dealer. Our platform still uses RouteOne or DealerTrack as the middle-man, so on the dealer side, everything is fully-loaded and properly-stored. The shopper with approved offers has a few to pick from and can select one before moving on with the deal—all while still sitting on the couch on a Friday night. In fact, 38% of all credit decisions on the AutoFi platform take place after hours, when the showroom is closed. Shoppers who didn’t get immediate approval will be notified that more information is needed, and then encouraged to set an appointment with the dealer to finalize the deal in person.

Time kills profitability and customer satisfaction. Instant decisioning helps to protect both. It keeps the shopper glued to your site and the car in your inventory. It breaks down the key barrier to buying a car—the financing. It delights shoppers and saves dealers time and money, since they spend less of both chasing down finance options.  

We believe this is the biggest hurdle left to conquer in the sales journey. That’s why we’ve spent 6 years perfecting it and growing our lender network to over 40 major banks, offering end-to-end digital retail that includes instant decisioning online, on-the-go, and in-store. Get started today