What is Automatic?
Automatic is a fintech platform that connects used auto dealers with accredited and institutional investors to make the financing experience more efficient and transparent.
What is the impetus for the Automatic Ecosystem?
The auto purchasing industry operates in a highly inefficient fashion with manual workflows, disparate providers, siloed and inaccurate data. Automatic’s software creates a single marketplace with trusted data, where all transactions can happen in one place. Lenders funnel their deals into one platform, where they can obtain all necessary F&I products. They are connected to additional vendors through API connections and incentivized for committing actions that produce quality deal flow. All data is normalized for investors interested in trusted investment opportunities. In this marketplace, a portal is also made available to the various investors, interested in quality yield. Automatic has signed key industry players, including but not limited to several F&I partners, dealer-management systems, floor-planning companies, and service contract & GAP Waiver providers to the platform. Automatic has focused on user experience (UX) to make the process of submitting a loan both seamless and engaging. Supplementary features, such as credit run capabilities, titling services and document generation, are made available for all parties in the transaction. Automatic is executing on its roadmap of automating, and centralizing the “over the phone” application and the negotiating cycle to be in-app. This allows dealers to adjust loan terms - against key LTV metrics - tailored to the collateral and borrower risk profile.
What are Automatic’s differentiators compared to existing auto industry software?
Automatic’s differentiators are: 1) expansive integrations with vendors/products across the previously siloed automobile purchase lifecycle; 2) superior workflow and UX in an industry mired in manual processes and disjointed applications; 3) normalized data and confidence in collateral to cut down on industry fraud and increase trust in business; and 4) end-to-end financial solution primed for “no-touch” environment that increases dealer financing option while also providing investment opportunities for investors in a zero yield environment.
Are there dealerships currently using Automatic?
As of December 31, 2020, 445 dealerships have registered onto the platform.
Is Automatic strictly limited to the independent car space? What other opportunities do you believe are available for Automatic as you continue to roll out the software and attract market share?
The total addressable market for Automatic extends beyond the independent dealership (ID) space. Automatic has targeted IDs as its initial market, because of the inefficiencies, technology gap, and revenue opportunities that exist in the space. In particular, the mid-class ID is the sweet spot for Automatic. Over 50% of these midsize dealers have a lot size less than 25,000 square feet, and have 1 to 2 store locations (as per NIADA 2020 report). Close to 90% of these independent dealers have cars with sales prices in the range of $5000-$15000 (average). About 20% sell between 101-250 units, with another 20% selling between 251-400 and about 15% selling between 401-550.
What are the strengths of Automatic?
Our strengths: 1) expansive, existing, and active dealer-lender network for the car industry 2) single-source of truth and normalized data 3) digitized and intuitive workflows for an industry that is forced to transform digitally at an accelerated pace 4) inclusive marketplace for F&I providers.