Consumers increasingly prefer to conduct business digitally, and our latest survey shows the auto loan industry is no exception. CI recently conducted a survey of 1,465 prospective and existing auto loan customers and found that a strong digital experience is crucial in the lender selection process. Nearly half (49%) of respondents who plan to obtain an auto loan within the next 12 months intend to apply for the loan digitally through the lender’s website or mobile app, while only 33% plan to obtain the loan through an agent or sales representative. This figure highlights the growing trend of consumers conducting research and making decisions in a low-pressure environment.

This chart shows the reasons users give for choosing their auto loan provider

To successfully attract prospective borrowers, lenders must offer a modern and user-friendly website with clear product positioning and marketing strategies. Interest rates remain a primary driver of decisions, as our survey found that the top cited reason for selecting a lender was that they offered attractive interest rates. However, brand recognition, prior relationship with the lender, or recommendations from family, friends, or even third-party websites also play a role. Thus, lenders unable to compete on interest rates should highlight their strengths and focus on cross-selling other financial products to existing clients.

15% of prospects would not even consider a firm that does not offer a digital account opening experience, and another 25% are unsure

The survey also revealed that firms failing to provide a seamless digital experience may not even be considered by a significant portion of prospective loan clients. In fact, 15% of prospects would not even consider a firm that does not offer a digital account opening experience, and another 25% are unsure. Additionally, 67% of prospects consider a strong digital application process at least “moderately important,” and 40% consider it “very important” or “extremely important.” To enhance the chances of converting prospects into loan account holders, lenders must prioritize a streamlined digital account opening process, complemented by various tools, calculators, and information about the loan application procedure. Digital prequalification or preapproval processes can prove advantageous as well, especially if instant decisions are provided.

This chart shows the importance of digital when it comes to auto loan account opening

Once a loan account is established, lenders must provide robust servicing tools to enable account management through the platform of the user’s choice. A mobile-first design is a competitive advantage for firms providing best-in-class experiences. Focusing on key user journeys such as checking loan balances, making payments, and viewing statements can prove effective, as clients tend to check their loan accounts less frequently than other financial products.

Our survey revealed that 39 different client experience digital attributes were rated as “very important” or “extremely important” by at least 50% of auto loan account holders. Loan information details are the most crucial element, as account holders want to be kept abreast of their progress toward paying off their loan. While loan details and account activity are two of the most paramount details, payment history and payment alerts are also vital, with 73% and 65% of respondents assigning them top-two box ratings, respectively. These findings suggest that reviewing loan details and making payments are the two core components of the digital auto loan experience.

This chart shows the top parts of the digital experience according to our user survey

A strong digital experience is crucial for lenders to attract prospective borrowers and convert them into loan account holders. With a growing preference for digital experiences, lenders must prioritize a modern and user-friendly website with clear product positioning and marketing strategies, digital prequalification or preapproval processes, streamlined digital account opening processes, and robust servicing tools. The survey shows that by focusing on the most critical digital experience components, lenders can ensure a best-in-class digital auto loan experience for customers and maximize their lending potential.

Learn more about our new home and auto loan subscription research services. And check out our Insights section for the latest trends and UX best practices from across the financial services world.