As consumer behavior shifts, the auto industry trends are revealing that it must develop new tactics to find success. Using data-driven insights, auto dealerships can make smarter financial decisions. One of the key tactics moving forward will be improving the buying experience through Know Your Customer (KYC) tools.
Unpacking the Latest Auto Industry Trends
Improving the buying experience is a big deal for many consumers looking to buy a vehicle. In fact, 72% of consumers would visit dealerships more if the buying process was improved. 54% of consumers would buy from dealerships with a preferred experience, even if it didn’t have the lowest price. This data highlights the need for improved experiences, which will draw more customers in, therefore boosting business.
This is even more important when considered in tandem with the current economic realities that many consumers face. In general, consumers are suffering greater financial stress. For example, debt for auto loans and leases has risen close to 15% in the last 10 years. Additionally, the YoY percentage of deep subprime and subprime borrowers with auto loans and leases is growing more so than other bands, with a 4.8% increase YoY for deep subprime and subprime.
Unfortunately, these pressures result in greater instances of fraud and delinquency. In 2023, synthetic identity fraud rose by a staggering 98%, which caused $7.9 billion in losses. The fact that loans and leases with risk of synthetic identity have a delinquency rate three to five times higher than the portfolio average is also concerning. As fraud rises, so too does delinquency.
Conclusion
Understanding these trends is a powerful tool when it comes to developing innovative solutions. Customers are looking for better buying experiences, which can make a big difference amidst troubling economic trends. By using KYC tools, auto dealerships can improve their models, reach more customers, and find more success.
