What is an Automated Approval Process and How Might it Affect Your Customers?

Traditionally, automobile dealerships have had a “red phone” communication with lenders. Speaking directly to an underwriter has historically made it easy to discuss options for your customers and find them the right solutions for their unique needs. Lately, the trend has been leaning toward a more automated process, and this could spell big trouble for your potential customers. What does it entail, and how can it hurt your business?

What is an Automated Underwriting System?

Otherwise known as an AUS, this is a technology that screens applications for specific criteria such as credit score, predetermined income limits, and employment status. Any application that does not meet these criteria will automatically be rejected, while those that do will be passed on to the next stage of the process. 

The reasons many large lenders such as Wells Fargo and Chase are turning to AUS involve efficiency and the standardization of the approval process. These large lenders also claim it brings transparency to the process, eliminates paperwork, and reduces cost.

How Can an AUS Hurt Your Customer’s Chances for Approval?

While an automated system may be appropriate for high-income earners with good credit scores, it will decrease the chances for customers with less than perfect credit, new jobs, and even a recent change of address. 

Underwriter Advice

One of the benefits of manual underwriting is the ability of the officer to suggest moves that will increase the odds for less-than-qualified customers. These may include tactics for increasing scores quickly or time-based approaches like waiting a month to receive a new job’s pay stub.

Automatic Rejection

Working with a manual underwriter means a customer has a chance to explain a score or a special circumstance. A real person can consider these circumstances and find a way to work with your customer and get them approved. The AUS ensures these applications never make it in front of a set of eyes.

Extended Processing Time

Some applications may be flagged as requiring the attention of a manual underwriter. Rather than streamlining the process, the application is now held in limbo until a loan officer takes a deeper look at it. This means same-day approvals may not be possible for your customers, which may cause them to look elsewhere for a vehicle.

Bay Motor Finance Relies on Manual Underwriters

At Bay Motor Finance, we understand that your customer deserves more than an automated rejection. Our underwriters find the solutions that connect your customers with the options they need to purchase the car they want, regardless of credit scores. This puts us in a unique position to provide more approvals and move more cars off the lot and into satisfied customers’ driveways. We prefer the traditional in-person approach because it lets us help more people and more dealerships find the solutions they need to connect people with the right cars, right now. Ready to see what partnering with Bay Motor Finance can do for your customers? Contact us now and let us show you how one-on-one loan services beat automation. Every time.