Automotive OEMs rate vehicle performance by the time it takes to go from zero to 60 in seconds. This is a measure of energy conversion – fuel, spark, and movement. While this is a mechanical situation, a comparison can be made to business response times. While fuel is a potential auto loan customer, the spark is a call from a dealer partner, and movement is how quickly your lending team responds to lock down the deal. Have you measured your lending team’s zero-to-60 response time? In this hyper-competitive lending climate, response time truly means the difference between a win – and a lost opportunity.
A recent report, published by Auto Finance News’ parent company Royal Media, analyzed 6,200 dealer evaluations to identify core traits which prompt dealers to choose one lender over another. One component of the report tracked callback time. On average, credit analysts returned calls in 65 minutes. Prime loan applications generated a response time within 56 minutes. Subprime application response time lagged to within 75 minutes, according to the report. In comparison to credit unions, banks and finance companies, captives had the fastest call back time at 62 minutes.
Is there a distinct difference in a lender’s response time based on a customer’s creditworthiness? Of course, there could be extenuating circumstances impacting these response times. Is the type of application outside the lender’s target portfolio? Is the call coming from a preferred dealer who offers only prime applications to specific institutions? The data can be sliced numerous ways. However, given the large sample size, the report bears attention. Continue reading