Automotive lending has been quickly transformed by artificial intelligence (AI) with the promise of faster, more accurate and more cost-effective credit decisions and approval processes.
Auto dealers are not exactly ready to embrace the new technology. According to the J.D. Power 2024 U.S. Dealer Financing Satisfaction Study, released recently, 55% of dealership finance teams say “they are uncomfortable with AI, up from 50% in 2023.”
Their top concerns with the technology center “on the loss of human interaction, inability to develop creative solutions and fear of job loss.”
Patrick Roosenberg, senior director of automotive finance intelligence at J.D. Power said:
“There is a growing sense of concern among dealer finance teams that the increased prevalence of AI in the lending process will limit their ability to find creative solutions, forge key relationships with lenders and effectively close deals. It is important to note, however, that this is not the first time that technology has upset the status quo. Lenders need to leverage past experiences and lessons learned in previous technological transformations, such as the introduction of digital and modern retailing technologies. These all ultimately improved the lending process for dealers who embraced the change and learned how to leverage technology to their advantage.”
The 2024 U.S. Dealer Financing Satisfaction Study is “based on responses from 4,472 auto dealer financial professionals.”
The study, which was fielded in “from March through May 2024, measures auto dealer satisfaction in five segments of lenders: captive premium—prime; captive mass market—prime; non-captive national—prime; non-captive regional—prime and non-captive sub-prime.”
As noted in the update, J.D. Power is a global firm focused on “consumer insights, advisory services, and data and analytics.”
A firm specializing in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power claims it “has been delivering incisive industry intelligence on customer interactions with brands and products for more than 55 years.”
The world’s businesses across major industries “rely on J.D. Power to guide their customer-facing strategies.”
