The shift to digitization and embedded finance is transforming every industry, and the auto business is no different. The newfound ability to offer financing at the point of sale is allowing stakeholders, from the factory floor to the auto shop, to better understand the key moments in the consumer journey and create value for themselves and their customers.
In an interview with PYMNTS, Neeraj Mehta, CEO of DigniFi, a FinTech platform that provides financing for buying and servicing cars, trucks and motorcycles, talked about how the consumer journey is inclusive of point of sale financing, repairs, maintenance and buying parts — and perhaps in the future, even more peripheral aspects, such as buying gas.
“One of the things people need to think about more is the moments that matter, as far as making a purchase,” Mehta said. “Those moments are really critical because they don’t just happen when you buy a car. They also happen when getting the car serviced and repaired.”
Mehta said the consumer journey actually begins with the automaker and encompasses the dealer and the customer. Until recently, no one has ever really been able to connect the dots in that journey, providing feedback from end users to the car manufacturers so they can use that information to create better products and distribute them more effectively.
“The data and information that the dealer gets regarding the consumer, the journey attracting them and converting them, ultimately you want to feed it back to the manufacturers,” he said.
Mehta believes there’s a golden opportunity for FinTechs like DigniFi to leverage that data. He explained that most dealers still operate a legacy model that involves just waiting for someone to walk into a showroom and then doing their utmost to impress them with the latest SUV in the hopes they’ll make the purchase there and then.
It’s very hit or miss, but if dealers and manufacturers have a better understanding of their customers’ journeys — and if they know exactly where that customer is in their journey — they can turn that model on its head. That’s what DigniFi is trying to do, providing dealers with access to the data that shows them a customer’s current car is six years old with over 100,000 miles on the clock.
Armed with that data, the dealer has a much higher chance of getting a sale.
“You can start engaging them even before they know they want to buy a car,” Mehta said. “I can hit you with that data so you come in and buy that car sooner, from me.”
Data provides more opportunities well beyond the showroom floor, though. With the understanding of customer journeys it brings, it makes it possible for dealers to engage with consumers via subscription services from within mobile apps.
DigniFi is having some success with that. Mehta pointed out that two years ago, most of its customers were people who’d simply used the company to finance their car purchase.
As a result, it meant 95% of its customers were paying off installment plans, with just 5% on a revolver loan, which refers to a credit balance that’s carried over from month to month that can be drawn on any time the customer needs to repair or maintain their vehicle.
Today, Mehta said almost 40% of DigniFi’s customers are on revolver finance. It’s an important transition, he explained, because it means the repair shop has the opportunity to remind customers they still have a credit line and ask if they’d like to do an oil change or buy some new tires.
There’s an opportunity to evolve beyond that. Mehta said DigniFi also sees a lot of potential in financing things like car insurance, and as cars are becoming more connected and integrated, maybe even providing credit for gas and road tolls.
Millions of people today already use their smartphones to pay for gas at the pump, so why not put a button on the car dashboard that allows people to do the same thing? Not only will it be more convenient for drivers, but it will also help by feeding more data on that customer journey into the ecosystem, back to the dealers and carmakers.
“It’s going to help make products better and make it more convenient for us to use and drive our cars,” Mehta said.
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