Buying a car isn’t easy.
And if you go the traditional route, the process almost always involves visiting a dealership in person and spending a lot of time on the financing and insurance part of the deal.
A San Francisco startup, AutoFi, wants to change that and has now joined with Ford to roll out its technology at a dealership in Ohio.
“By combining our fast and efficient credit-decision process with AutoFi’s online capability, we are making the customer experience faster, smoother and simpler,” Lee Jelenic, Ford Credit’s director of mobility, said in a statement.
“With its experience in used-vehicle online financing and well-developed platform, AutoFi makes it easier for us to adopt new technology quickly to meet the evolving consumer expectations.”
There’s something to be said for going old-school and heading down to the dealership, pressing the flesh with a salesperson and haggling over the price. You may be able to get a better deal that way. But inevitably, if you don’t have a pocketful of cash, you’ll be looking at financing your new vehicle, and for many customers, that undertaking can create onerous delays.
“Our innovation is that the lender competes for your business,” Kevin Singerman, AutoFi’s CEO, told Business Insider. “You pick the deal that’s best for you.”
Speed is of the essence. “One of our first customers did it in seven minutes,” Singerman said. “The dealership gets a customer in and out in under an hour.”
Financing and delivery from the comfort of home
In fact, because AutoFi’s platform is accessible via the dealer’s website, it’s possible to decide that you want, say, a new Ford Escape compact SUV, then to option up the vehicle and arrange financing and insurance without leaving home.
The dealership will then compile the documents you need to sign and deliver both them and the Escape to your residence. You can even throw in a test drive if you want. The whole deal can take place on a smartphone.
AutoFi was founded in 2015 and has received close to $20 million in funding, including a $17-million round last year, according to CrunchBase. Prior to partnering with Ford, the company had focused in used-car financing. This is its first foray into working with what’s known in the auto industry as a “captive” lender — Ford’s own credit arm, which concentrates on financing new-car purchases and leases.
“The only way to get into new is to partner with captive from start,” Singerman said. “We had to do a strategic tie-up — we had to acquire that knowledge.”
Ford also announced that it had made an “equity investment” in AutoFi. The amount wasn’t disclosed.
“The platform can be used now at Ricart Ford in Groveport, Ohio, and will roll out over time to more Ford and Lincoln dealerships across the United States,” Ford said.
But Ford hasn’t committed to taking the traditional showroom visit out of the equation.
“The introduction comes as 83 per cent of Americans say they would like to reduce the amount of time spent at dealerships, according to a Harris Poll of more than 1,000 U.S. adults conducted on behalf of Ford Motor Company,” Ford said.
“Many of those same people, however, still want to touch and feel their new vehicle before signing on the dotted line. The Ford Credit-AutoFi platform provides the best of both worlds.”
The partnership was “soft launched” late last year, according to Singerman. “We add a lot of value solving the [financing] pain point,” he said, adding that dealers are moving toward one-price, no-haggle pricing.
“That really enables online purchasing,” he said.