In an effort to help simplify funding for auto loans, U.S. Bank has announced the success of a pilot program that tested instant real-time payments to car dealerships. Following the pilot program, U.S. Bank shares that they will now be able to provide instant funding to dealers once an auto loan has been cleared by a bank.
Over 800 auto dealers have enrolled in the real-time payment solution provided by U.S. Bank, both single dealerships and those with multiple locations. The real-time instant payment process will also be available to dealerships that work with loan companies and banks that are eligible for the RTP Network.
While the announcement of this news is certainly exciting, what does it mean for dealerships and ultimately consumers? In short, both dealers and consumers can look forward to a more streamlined process when it comes to financing a new or used vehicle. Here’s more on what dealers and consumers can expect to find.
What Does Real-Time Payment Mean for Dealerships?
The successful pilot program has enabled auto dealerships across the nation to receive real-time payments. Traditionally, payment can take up to several days to a week after a loan has been approved. With this new system, payment can take place instantly, seven days a week, holidays included. This instant access to funding allows dealerships to have greater control over their cash flow. It also allows them to have better “Contract-in-Transit metrics” according to U.S. Bank.
The president of dealer services at U.S.Bank, John Hyatt praised the success of the pilot program. He shared, “We’re simplifying loan payment processes to help our dealer clients better control their cash flow, which gives them a competitive edge and peace of mind”.
Hyatt highlights that this real-time payment solution will especially be beneficial to dealerships that operate during the evening and on weekends. As this is typically a time when the administrative process of finalizing an auto loan is paused because it’s outside traditional banking hours.
How Does Real-Time Payment Impact Consumers?
Financing a new or used vehicle is complicated and drawn out as is. Dealerships, especially ones that care about their customers are always looking for new ways to improve pain points during the financial process.
For many consumers, this ease of access to funding that dealerships will have allows consumers to finalize their auto deal quicker than before. This means it’s more streamlined with a lot less waiting time in order to get into that new car of your dreams.
Final Thoughts
In today’s world, anything that simplifies the financial process of any purchase, especially a big ticket like a vehicle purchase, is a welcomed tool. U.S. Bank shares that this new payment solution is gaining traction and is likely to draw in hundreds more dealers nationwide.
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