Competitive
Landscape in the US Auto Finance Market
The Competition in the US
vehicle finance market is extremely fragmented. The Major lending
institution types in the market are Banks, Captives, Private Finance Companies
and Credit Unions. Banks hold a majority share in the lending space for New
Vehicles, and Captives dominate the Used Vehicle segment. Some of the leading banking institutions
include Ally Financial, Capital One, Bank of America, Wells Fargo and Chase
Auto Finance. Stiff competition was observed in the case of Captives including
Toyota Motor Credit Corporation, GM Financial, American Honda Finance
Corporation, Nissan Motor Acceptance Corporation and Ford Motor Credit
Corporation. Credit Unions such as Pentagon Federal Credit Union have been seen
to register double digit growth, representing the trend of the rapid growth of
credit union. Parameters on the basis of which companies compete in the market
include interest rate, digitalization, and ease of transaction, distribution
network, service portfolio and others.
Snapshot
on Digitization of US Auto Finance
The Digital based Vehicle Finance model looks to increase convenience
and reduce the number of stakeholders in the market to provide a streamlined
lending experience for the borrower. It relies on the delimiting resource of
internet to increase awareness among the end users in the market, which are the
consumers. The process today, begins on a web browser window, when the borrower
researches potential vehicles, dealers providing the preferred vehicle,
financing options and financing outlets. Then Lead Generation kicks in, and
allows the dealership to directly contact the customer. Or the borrower can
sort out financing of the vehicle before deciding about the purchase, by
applying for preapproval online at a lender’s website. All this is done before
contacting the dealership or the lender. Once the borrower is in contact with
the dealership, the process follows a similar path to the traditional model and
ends when the vehicle is delivered. But with the ever increasing level of
technology, important aspects such as CRM, Marketing, and Payments are
prevalently being integrated digitally. The scope of incorporating
digitalization into the vehicle financing process knows no bounds.
The complication of the loan process, by way of the ‘decision fatigue’
caused by increasingly long negotiations at the dealerships and lengthy
paperwork, mandated the introduction of digital auto lending Dealerships
have an option of either generating their own leads through expanding their
marketing capabilities, or reaching out to specialized Lead Generation
Companies. Many Auto Lead Generation sites are coming forward to establish
connections between prospective customers and automotive dealers.
These lead generation sites operate on the behalf of different auto
dealers and gather auto leads qualifying to their specific dealership
conditions and get paid either on the basis of total sales conversions made or
the total number of leads they generate or a combination of both. By using
proven marketing methods, the auto lead generation companies not just generate
leads but also maintain them in a database for inquiry purposes. They allow the
lead to fill up an online form covering information on the loan amount,
desirable car model or making and contact details. This form is then supplied
to approaching dealers, in exchange for a lead generation fee. As soon as the
automotive lead is bought out from the lead generators, the lenders create a
proposal for the borrower based on his or her queries and specifications given
in the form.
US
Auto Finance market Future Outlook and Projections
The US Vehicle Finance market is expected to be positive if there is a
continuous need for motor vehicle among the population. Multiple fin-tech
startups have also come up in the country’s financial sector which poses a
threat to conventional finance companies and banks. These start ups have
developed products to augment the digitalization of the banking sector. This
includes digital payments, online lending, online aggregation and remote
banking facilities which made customer lending process uncomplicated and simple
further facilitating the car finance market in the country. Banks and Captives
are expected to continue their leading position in the market due to their vast
networks and range of products. In addition to that, the US Vehicle market is
likely to witness a decline in auto sales which threatens the growth of number
of loans issued in the future.
Key Segments Covered:-
By New and Used Vehicle
New
Vehicle
Used
Vehicle
By Type Vehicle
Passenger
Cars
Light
Trucks
By Lender Category
Banks
Captives
and BHPH
Credit
Unions
Private
Finance Companies
By Risk Category between New and Used
Vehicles
Super
Prime
Prime
Non-prime
Sub-prime
Deep
Sub-rime
By Loan Tenure between New and Pre-Owned
Motor Vehicles
Less
than 3 Years
Three
Years
Four
Years
Five
Years
Six
Years
Seven
Years or more
Key Target Audience:-
Existing
Auto Finance Companies
Banks
Captive
Finance Companies
Credit
Unions
Private
Finance Companies
New
Market Entrants
Government
Organizations
Investors
Automobile
Associations
Automobile
OEMs
Time Period Captured in the Report:-
Historical Period: 2013-2018
Forecast Period: 2018-2023
Key Companies Covered:-
Banks
Ally
Financial
Wells
Fargo
Bank
of America
Chase
Auto Finance
Capital
One
Captives, Credit Unions and Finance
Companies
Toyota
Motor Credit Corporation
Ford
Motor Credit
Nissan
Motor Acceptance Corporation
GM
Financial
American
Honda Motor Corporation
Credit
Acceptance
Santander
Consumer USA
Pentagon
Federal Credit Union
For more information on the research
report, refer to below link:-
Related
Reports:-
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
