Imagine a customer coming in on a Saturday and buying a car. That’s nothing out of the ordinary, right? But now imagine that during this sale, once the customer signs the deal and financing is selected and approved, the auto loan funding is transferred from the lender to your dealership in seconds. Now imagine that you can access that money immediately — before the customer is even out of the lot. It’s possible with instant payments through the FedNow® Service.
With the FedNow Service, financial institutions can offer instant auto loan funding — even on nights and weekends. This transformative service brings advantages to both dealership and their customers.
A seamless experience for buyers
Auto buyers that can use instant auto loan disbursements — either directly through their financial institution or via financing at the dealership — benefit from a fast, frictionless financing experience. They can purchase a vehicle feeling confident that the payment will arrive in seconds, allowing them to purchase their new automobile without delays that may arise with other payment methods. Plus, with instant auto loans, buyers don’t need to bring a check or other payment method with them to the dealership — the process is fast and convenient.
Better cash flow management for auto dealers
Auto dealerships can benefit from getting paid via instant payments. Because money is cleared and settled immediately and funds are accessible right away, dealerships gain more control over cash flow and reduce the risk of an asset leaving the lot before a transaction is complete. Additionally, if an auto dealership is able to send instant payments via their own financial institution, it can precisely time repayment of floorplan loans and transfer funds immediately, enabling faster acquisition of new inventory.
Beyond auto loan financing
Loan disbursements are just one use case for instant payments when it comes to the auto industry. Additional, related use cases include:
- Floorplan loan repayments: Auto dealerships can use instant payments to repay capital loans, allowing them to acquire new inventory quicker.
- Auto parts purchases: Auto dealerships can pay suppliers for parts needed for maintenance and repairs with instant payments.
- Down payments or cash sales: Buyers can transfer money immediately from their personal account to a dealership.
- Consumer auto loan repayments: Buyers can make monthly loan repayments instantly, eliminating the use of paper checks and gaining the ability to precisely time payments.
Learn more
Instant auto loans are more than a technology upgrade — they represent an opportunity to transform the car-buying experience. Ready to explore more information about instant auto loans?
Check out our latest resource to learn more about instant payments, and make plans to have conversations with financial institutions in your area to see if they offer instant payments through the FedNow Service network.
