Artificial intelligence-based lending platform Upstart is adding new digital financing and online sales applications to its auto retail platform to improve loan approval rates and expand credit access.
Digital financing gives dealers access to Upstart’s AI-powered financing and allows consumers to visit a dealer’s site for loan approval before stepping into the dealership, Alex Rouse, vice president and general manager of auto and auto retail at Upstart, told Bank Automation News’ sister publication Auto Finance News.
The product “allows any dealership to take advantage of our AI-powered financing offers without having to change their existing sales processes or technology,” Rouse said. “With AI-powered financing, they get access to differentiated underwriting or risk-prediction algorithms.”
San Mateo, Calif.-based Upstart began piloting the new applications in 28 dealer rooftops during the fourth quarter of 2022 and reached an average finance penetration of 25%, which is “way higher” than what the lender anticipated, he said.
“[The product] is going to launch in Q2 and continue to roll out for the rest of the year,” Rouse said. “We are live in five states across 28 rooftops, supporting more than 20% of the population. We are finalizing the technical capabilities to cover all 50 states in compliance with their legal requirements this year.”
Expanding credit access
Dealers can leverage the digital financing tool for higher loan approval rates and to expand credit access for consumers, Rouse told AFN.
“We’ll be able to approve people that other lenders might be declining and provide lower APRs,” he said, noting that 70% of the loans originated during the pilot were to consumers with no other loan offers.
Upstart is also rolling out an online sales application, giving consumers the ability to complete a vehicle purchase digitally through e-contracting.
“Once customers select the car, they fill out a credit application, review financing offers, provide needed STIPS, e-sign their documents, and they’re good to go,” Rouse said. “From search to signing, all that’s left is picking up the keys.”
“We cover the complete car-buying journey from browsing inventory on a dealership’s website to getting access to unique AI-powered financing opportunities, to digital signature and closing,” he said.
Editor’s Note: This article was first published on Bank Automation News’ sister site, Auto Finance News.
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