NEW YORK – Wolters Kluwer announced third quarter results and analysis from its Auto Finance Digital Transformation Index, a key resource that tracks the rate at which auto dealers, service providers and lenders are seeing growth in the evolution from paper-based finance back-office processes to digital. Click here to see the full data infographic.
According to the Index, auto dealers, service providers and lenders have continued their growth into digital at a rate of 87% over the last twelve months; a 60% growth rate comparing Q3 2022 to Q3 2021; and a growth rate of 17% when comparing to Q2 of 2022.
The continued macroeconomic impact in auto purchases is having an effect on the overall Index eContract volume, however, digital adoption still remains steady. Given the downturn in sales activity, digital use increased 81% compared to the same time last year. With that in mind, this year’s eContract volume has already exceeded 2021 YTD by a 21% margin, indicating continued digital transformation growth.
This continued rate of growth is considerable given the fact that the industry sold just over 15 million vehicles in 2021, yet the pace of sales in Septemberstood at 13.67 million units – a 9.3% decrease.
“The fact we’re still seeing such noticeable growth in digital at a time when the industry is facing a dropoff in overall sales illustrates the staunch appetite for digital tools, resources, and assets used by dealers, lenders and service providers,” said Tim Yalich, Head of Auto Strategy for Wolters Kluwer.“The combination for more efficiency, accuracy and compliance is fueling this growth, and with the consumer’s appetite for more online shopping options, we see this growth continuing into 2023.”
The automotive and auto lending industries recognize the importance of adopting a paper-to-digital transformation to improve business processes, remain compliant, reduce risks, achieve higher efficiencies, and satisfy customers through more seamless transactions. This transformation helps automotive professionals keep compliance top of mind proactively with changing regulations and mandates, rather than leaving it on the back burner and opening up to exposure in a paper-based environment.
An industry survey earlier this year revealed that the majority of dealers said the process to complete a transaction in the dealership takes in excess of 30 minutes using paper-based documentation. However, this dropped to under 20 minutes when dealers said they used digitized documentation tools.
