Artificial intelligence (AI) and machine learning are reshaping industries across many sectors, including finance. AI and machine learning are already having a significant impact on the auto finance industry by automating tasks and streamlining processes. AI and machine learning are already being used to automate tasks in the auto finance industry, such as underwriting, loan servicing, and risk management. 

AI and machine learning are also being used to make auto lending more personal and make the auto finance process easier for borrowers. This article discusses how AI is disrupting the auto finance industry and what auto finance professionals need to know about this technology.

An Overview of Auto Financing and AI 

The auto finance industry is a billion-dollar industry, and with the use of AI and machine learning, it is only poised to grow. As one of the fastest-growing industries globally, it’s no wonder that this is an attractive sector for AI applications.

AI can make processes more efficient by reducing time spent on underwriting and loan servicing tasks. In addition, AI technology will be able to automate these tasks, which frees up professionals in the industry to focus on higher-level tasks.

Furthermore, AI can help lenders make lending decisions faster for borrowers by analyzing data about them based on their online footprint. 

AI can also personalize its interactions with a borrower by answering questions about loan options or offering other services related to credit cards or mortgages. These are all valuable benefits of making borrowing easier for customers in this industry.

AI in Auto Sales 

AI is being used to take the place of car salespeople. Some companies have already started selling cars without a single salesperson by integrating AI into their vehicle-selling process. This is done in conjunction with a human representative, who will answer questions and help guide consumers, but it’s the AI that communicates with customers and makes the purchase.

In one example, customers were pre-approved for a loan before arriving at the dealership, creating an easy and transparent way to buy a car. The customer would be able to see how much they had saved on the price of the car upfront because there are no hidden fees or extra costs associated with the purchase.

It’s estimated that over 2 million auto loans were approved using AI in 2016 alone, and this number will only grow as more people become comfortable with interacting with robots.

 AI in Auto Leasing

AI is already being used to make auto leasing more personal, which could revolutionize the industry. One example of this is what Toyota did with its chatbot, Kirobo.

The company created a chatbot that asks you general questions about your lifestyle habits and then uses that information to recommend a car to lease. Using AI, the chatbot would be able to provide different options for you depending on what type of car you might be looking for or if you are renting it out or buying it. This is just one example of how AI is impacting auto leasing.

 AI in Auto Rental

Rental cars are a significant expense for car dealerships. When car buyers don’t have the cash to purchase the vehicle outright, renting the car for a monthly fee is often necessary. This monthly fee can be costly and difficult to budget for, but it’s relatively simple for many consumers.

AI in auto rental allows people to rent vehicles without a credit check. Instead, customers submit their driver’s license or passport and pay a deposit. The company then sends them an email with directions to pick up their car at a nearby location. As a result, auto rental companies can provide quick service while securing an upfront payment that covers some costs of renting out the vehicle. 

With more than 70 percent of US adults having less than $500 in savings, many people need auto financing because they lack liquid assets and cannot make large down payments. For these consumers, AI allows them to get into a new vehicle without putting any money down by using third-party financing options such as subprime loans.  Subprime loans that lenders offer use underwriting algorithms instead of human managers who may not want to take on riskier borrowers due to low margins in this sector.

Benefits of AI in the Auto Finance Industry 

AI and machine learning are making the auto finance process easier for borrowers by transforming how they search for, apply for, and receive financing. For example:

AI can analyze a customer’s data to determine the length of repayment term that would best suit the customer. This means a customer does not need to manually input this information to find the loan that suits their needs.

 AI can also provide customers with personalized information about their loan options. This means users do not have to spend hours researching lending rates or eligibility requirements before applying for a loan – AI can provide them with all of this information at once.

Machine learning algorithms use past data points from different loans and other sources to calculate your new loan’s estimated monthly payment amount. As a result, borrowers no longer have to enter this information themselves and instead focus on more critical tasks such as determining whether they qualify for a specific loan program or calculating how much they can afford each month.

What Auto Finance Professionals Need to Know About AI and Machine Learning 

AI and machine learning are already making significant changes to the auto finance industry. For example, automating tasks like underwriting, loan servicing, and risk management radically transform how auto finance professionals do their jobs. 

AI and machine learning are transforming the lending process for borrowers. For example, AI can determine a borrower’s creditworthiness in just a few minutes. As a result, borrowers don’t have to spend hours of paperwork before being approved for a loan. Instead, they can use that time to complete other financial tasks. AI is also used to make lending more personal, so borrowers feel their needs are being met. 

Auto finance professionals should prepare themselves for what AI will mean for the industry in the foreseeable future. Auto finance professionals need to be aware of how this technology will change the job market and stay on top of new developments in artificial intelligence if they want to remain competitive in an increasingly automated environment.

Key Takeaway

Artificial intelligence is reshaping the auto finance industry by automating tasks and streamlining processes. AI is already being used to automate tasks in the auto finance industry, such as underwriting, loan servicing, and risk management. It’s also being used to make the process easier for borrowers. To know more about how we can help, please visit us at www.deepdatum.ai