U.S. Bank ready to fund auto loans ‘instantly’ for more car dealers

U.S. Bank can pay more than 800 auto dealerships instantly after finalizing an auto loan, and the bank said Aug. 9 it’s ready to extend these “real-time payments” to more retailers.

“I had to keep re-writing the release to change [the 800-dealer figure] because it kept growing as I was putting it together,” spokesman Todd Deutsch wrote in an Aug. 9 email to Automotive News.

He said this network includes both single-store dealerships and multiple-location retailers.

U.S. Bank said it finished a pilot version of the program in June.

“Dealer interest in this solution over the last few weeks has grown rapidly, with many particularly excited about finalizing their deals within moments after a consumer is approved for a loan — especially during the evenings and even on Saturdays and Sundays,” U.S. Bank dealer services President John Hyatt said in a statement.

Traditional digital money transfers through the Automated Clearing House can take multiple days, particularly if the dealership sells a car outside of banking hours, according to U.S. Bank. The ability to have loans funded instantly by the lender through the Automated Clearing House’s RTP network improves cash-flow control and contract-in-transit metrics, the bank said.

U.S. Bank spokeswoman Kristin Kelly said Tuesday her company can now issue these immediate payments to any dealerships that work with U.S. Bank on indirect loans and banks with a company eligible for the RTP network.

“U.S. Bank is focused on delivering innovative real-time payment solutions to resolve what our customers tell us are their payments’ pain points,” Hyatt said in a statement. “We’re simplifying loan payment processes to help our dealer clients better control their cash flow, which gives them a competitive edge and peace of mind.”

U.S. Bank also this year introduced a variant of the real-time payment program to users of Lithia Motors’ digital retail platform Driveway. Customers who sell their vehicles to the national dealership group now can be paid in seconds instead of the traditional 24 to 48 hours for digital ACH transfers, U.S. Bank said in March. The program is not exclusive, but it is unclear if retailers other than Lithia have worked with U.S. Bank to add a similar capability.

Lithia, of Medford, Ore., ranks No. 2 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 260,738 new vehicles in 2021.