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American bank can now provide loan funds to auto dealerships immediately after the bank finalizes a loan agreement, according to a Tuesday, August 9 Press release.
The bank has helped more than 800 car dealerships receive funds in real time following a pilot program in June. US Bank said in the statement that it plans to roll out the solution to other dealers in the coming months.
“While the traditional ACH payment method for auto loan financing can take several days – especially when sales are made outside of bank hours – real-time payments to dealerships are fast, secure and available. seven days a week, including holidays,” the statement said. . “Auto dealerships using real-time payments gain a competitive advantage, with better cash flow control and improved in-transit contract metrics, a key performance indicator for auto dealerships and their employees.”
John Hyattpresident of the bank’s dealer services, said in the statement that car sellers’ interest in the solution had “increased rapidly” in recent weeks, with many dealers particularly excited to finalize deals in the evening. and the weekend.
Auto lenders are facing a credit crunch, especially those lending to the subprime market.
Read more: Credit crunch looms for auto lenders as paycheck-to-paycheck pressures escalate
Credit acceptance, a company that helps car dealerships offer financing, warned last week of the short-term outlook for timely payments on recently issued loans. The company said its metrics showed collection rates falling to 67.1%, compared to its forecast of 67.6%.
That forecast applied to consumer loans issued this year, the company said, adding that the decline would impact cash flow.
Meanwhile, prices for new and used cars hit a record high in June, according to Kelley Blue Book, which said a new car in the United States averaged around $48,000, while the price of a used car was around $28,000.
See more : Supply chain rumble will keep car prices high, Morgan Stanley analyst says
This price hike is mainly due to global supply chain issues, which are hampering deliveries for automakers such as GM and Toyota.
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NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS
About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.
