Featuring AVP/Lender Strategist Andy Mayers with insights from the latest Cox Automotive Research
Cox Automotive sees this trend climbing year over year: more consumers are starting their car-buying journey online — and increasingly, they’re researching financing options before anything else. In our latest Car Buying Journey study, over half of buyers explored financing on a lender’s website, putting a spotlight on the long-standing dominance of indirect lending.
To be clear, indirect remains a strong origination channel — but technology, among other factors, is evolving the marketplace. Consumers now have more entry paths to shopping, and financing steps are moving up the funnel. That means lenders who rely solely on indirect channels may be leaving business on the table. Even those with direct lending models in place are missing opportunities to capture more of the business they want.
Let’s Crunch the Numbers
According to our Dealer-Lender Relationship Study, 4 out of 5 finance-approved deals are flipped, leaving lenders with a look-to-book ratio of just 20%. It doesn’t matter where the credit application originated — if a dealer finds a structure that boosts profitability with a rate and term the customer agrees to, they’ll likely flip the deal.
Now, combine that with the growing trend of consumers securing financing before visiting a dealership. You’ve got a compound challenge:
- Buyers are looking for financing first.
- Dealers are likely to flip that customer to another lender.
But Here’s the Twist
87% of dealers told us they could be convinced not to flip a pre-approved customer. Surprised?
If so, we get it. Allay your suspicions by tuning into Andy Mayers’ latest Forward-thinking Strategy session, where he hits this challenge head on with a bold new business channel — Direct to Indirect Lending.
Why Direct to Indirect Works
Savvy lenders who’ve implemented this forward-thinking channel are seeing real results. Here’s what they’re gaining:
- Supports customer acquisition and retention: Engage customers on your website and retain their loan business.
- Creates a new revenue stream: Expand beyond traditional origination models.
- Builds stronger dealer relationships: Hand-deliver contract-ready buyers to dealer partners.
- Provides flip protection: Safeguards built into the dealer workflow reduce risk.
- Improves look-to-book: Your finance-approved shoppers are easily converted to booked business.
Ready to Flip the Script?
Listen to Andy’s latest 5-minute strategy session and join the savvy lenders already tackling one of the financing industry’s most persistent challenges. Then, let’s talk.
