Let’s face it, the car-buying experience isn’t quite where it should be. While other industries have raced ahead to deliver comprehensive digital experiences to consumers, auto retail has lagged behind. We saw some advances—such as a faster move to digital retail—during the COVID-19 pandemic, but there’s still a disconnect between online and in-store shopping, the lending process remains cumbersome and inefficient, and fully online transactions are still far from the industry standard. That’s left a lot of customers unhappy. In fact, according to one McKinsey & Co. study, only 1% of respondents were fully satisfied with the car-buying process. Meanwhile, companies such as Tesla and Carvana are creating a streamlined experience that has consumers excited about buying a car—and one that's prompting dealers to respond. 

What Car Buying Should Look Like

At Upstart, we believe that the seamless, digital experiences we already use every day in other areas of our lives should be carried over to auto retail and integrated with the showroom experience at dealerships. Think of it as the perfect combination of Apple’s intuitive and elegant online-to-in-store shopping, Amazon’s obsession with convenience and seamless operations, and AI’s ability to streamline and enhance the lending experience—all applied to car shopping. 

But what does that look like? It’s dealer websites that offer virtually everything buyers need to find and build the vehicle they want, including models and trims, accessories, financing estimates, test-drive booking, trade-in car valuation, and the ability to compare other models and feel confident about their decision. And all of that online activity is connected to dealers’ CRM software so that customers can seamlessly pick up in-store where they left off online. At the dealership, it’s a strong web-based sales product with the online customer’s information a click away and the ability to generate multiple pencils on price and financing without leaving the customer to get approvals from a manager—something that fosters transparency and is critical to building trust with customers. It’s also the powerful combination of alternative data and AI to help more creditworthy borrowers qualify for fairly priced auto loans, rather than relying on a simple three-digit credit score invented over 30 years ago. More people getting the affordable loans they need to buy the cars they want is also a boon for dealers.

To get there, these products should fit into dealers’ existing technology tech stack and be open and configurable to their current sales processes. They should also be flexible enough to help dealers evolve their sales process over time, such as moving from a traditional approach to a single point of contact.

What We’ve Built at Upstart

Upstart believes in increasing consumer access to credit to unlock opportunity. Car ownership in the U.S. is central to that pursuit. It’s how many people get to work, take their children to school, and support other aspects of their lives. Without access to fairly priced credit to finance the purchase of a car, access to mobility is not possible for millions of credit-challenged Americans. That’s why, in 2021, Upstart purchased Prodigy, the leading in-store sales technology for dealers. Since then, we’ve expanded the product and partnered with top car manufacturers to turn Upstart Auto Retail into a leading connected retailing solution for franchise dealers. By combining this software with Upstart-powered financing, we provide an easier, faster, and more flexible way for more consumers to buy and finance a car.

From the living room to the showroom, Upstart Auto Retail orchestrates every step of the buyer journey, through many of the features I mentioned above. That’s why our partner Del Grande Dealer Group was able to grow its online lead close rate by 75%, while Power Kia cut the time a customer spent on the showroom floor to just 25 minutes. Germain Automotive Partnership shrunk its entire deal process by a full 90 minutes. And Lexus of Lehigh Valley went so far as to deliver 67% of their vehicles sold without customers even having to go into the store.

“The most important part is that Upstart Auto Retail makes everything easier for customers,” Power Kia Sales Manager Tyler Degele told me. “You don’t always realize the hassles, hiccups, and wasted time in the process until you see how technology can improve it. The only way to raise gross profit is by making the customer happy.”

We’re also upgrading the F&I process with financing powered by Upstart AI that we’ve been piloting since last year. Among the 30+ rooftops in the pilot, we’ve seen finance penetration numbers of almost 25% and, for almost 70% of financing applications, we’re the only offer. That means that without our offer the dealership wouldn’t have been able to sell the car.  

What’s Still to Come

Of course, there’s still a lot more to do. Our goal is to deliver Upstart-powered financing to all dealers over the coming year as well as facilitate e-contracting so that consumers who want to can buy a car fully online. From search to signing, all that’ll be left is delivering the vehicle.  

Even as soon as a year from now, the car-buying journey could be radically different when we deliver these features. And beyond that, we’ll continue to deliver new ways to better serve customers. For example, we’re currently working on extending Upstart's deep expertise in AI to enhance the car-buying process, such as recommending add-on packages based on a customer’s preferences. Whatever’s on the horizon, we must work to improve the car-buying experience now to keep pace with the kinds of experiences that customers demand.

About Upstart Auto Retail

Upstart Auto Retail is a leader in modern automotive retail solutions, providing the most seamless and flexible connected retailing platform for dealers to increase sales efficiency and customer satisfaction.

Visit us today at upstart.com/dealers or reach out to dealers@upstart.com