Millions of cars and trucks are purchased in the U.S. each year, and the majority of these sales are financed. With instant payments through the FedNow Service, credit unions and banks can disburse auto loans instantly, ensuring auto dealerships get paid in seconds and buyers can drive off the lot without delays.
By offering instant auto loans, financial institutions can better serve the auto dealerships they partner with and improve the car-purchasing experience for buyers.
Additionally, financial institutions can generate new loan opportunities with instant payments. For example, if the terms of a loan are the same, an individual buying a car on the weekend may be incentivized to choose the financial institution that offers loan proceeds immediately versus another institution that requires a payment be made during regular business hours. If this resulted in four new loans per month, here's what that might look like:
- Avg. loan amount: $33,506*
- Terms (months): 68*
- Interest rate (assumed): 4.5%
- Estimated annual revenue from interest: $30,273
*Based on Lending Tree Auto Loan Statistics
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