The Wolters Kluwer Auto Finance Digital Transformation Index shows continued growth in adoption rates in the second quarter
Strong seasonal trends operate in the auto and secondary loan markets driven by the tax season.
NEW YORK, August 06, 2024–(BUSINESS WIRE)– The annual rate of digital adoption for contract and transaction documents in the US auto market increased 29% in the second quarter for lenders and dealers, according to an analysis by Wolters Kluwer Compliance Solutions from. the same Q2 Auto Finance Digital Transformation Index.
The surge in adoptions has come against the backdrop of a volatile global economy and a near-bargaining attack on the auto industry that hampered sales towards the end of the second quarter, as car sales new ones were relatively flat with sales of new cars and trucks estimated at 4.1 million. The Index follows the pace at which car dealers, service providers and lenders are seeing growth from modern to digital financial systems.
“Having reached the midpoint of 2024, we are reminded of the true power of digital adoption in an industry that still operates according to legacy philosophies,” it said. Tim YalichHead of Auto Strategy for Wolters Kluwer. “An increasing number of automotive businesses and professionals continue to use digital methods for their back-office work and documentation. Even more impressive, despite the ransomware attack that threatened many businesses in a paper-based environment, many saw the opportunities to go around and stay digital, to ensure the importance of implementing all their work processes to meet the needs of consumers.”
The continued growth of eContracting over the past year
According to Wolters Kluwer data, car dealers and their lending partners continue to look for opportunities to adopt digitized contracts and operating documents to increase back office efficiency. Although the Q2 acceptance rate compared to the previous quarter was up slightly at 3% due to normal seasonal trends in the auto industry, the four-year trend shows continued growth. ahead of digital adoption of 165% from the second quarter of 2020.
Securitization markets drive YoY growth in digital adoption
Wolters Kluwer’s Q2 Auto Finance Digital Transformation Index also shows that the rate of adoption of digitization for securitization markets continues to accelerate. The number of digital car loans in the security markets decreased by 41% on a seasonal basis compared to the first quarter of 2024; however, the volume was up 39% compared to the same period last year. In the last four years, digital adoption for security has increased by 70%.
According to S&P Global, US auto loan and subprime auto ABS saw improved monthly performance through March 2024 due to the tax refund period. In addition, as of the end of April, the year-on-year inventory of vehicle-backed goods is up 38.3% over the previous year, largely driven by an increase in primary supply. This trend, together with the time period of the purchase tax period, are the main reasons for the continued growth of digital adoption rates for the safe and secondary markets.
To learn more and access additional data from the Wolters Kluwer Auto Finance Digital Transformation Index, click here.
To learn more about Wolters Kluwer, please visit: www.wolterskluwer.com.
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Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software solutions and services for healthcare professionals; tax and accounting; financial and commercial agreement; law and order; business performance and ESG. We help our customers make important decisions every day by giving professional solutions which combine deep domain knowledge with technology and services.
Wolters Kluwer reports revenue for the year 2023 of €5.6 billion. The group serves customers in more than 180 countries, maintains operations in more than 40 countries, and employs approximately 21,400 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.
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