How can Blockchain Tech help Car Dealerships?

Blockchain is one of those concepts that is the talk of the town these days, but not everybody seems to be very clear about what it is or how it works. Many businesses, including auto dealer service providers, throw this word out there in an attempt to try and impress their prospective customers. However, there are very real benefits that blockchain technology can provide for your car dealership.

In this article, we will tell you how you can use blockchain technology to give your dealership a performance boost.

Customer Relations and Service Management

Blockchain facilitates an easier collection method of gathering VIN specific information, such as data points regarding service history, driving behavior, GPS locations, and so on. This will in turn make it simpler for auto dealers to connect with their customers as cars become more connected than ever before.

It’s not only the service department that benefits due to blockchain either. With the power of blockchain technology, sales department staff will have a much easier task when persuading existing clients for up-selling.

Blockchain tech also takes advantage of the fact that warranty information is easily obtainable and equally easy to track. Any changes, such as extended warranty registrations or total loss vehicles are traced in real time instead of the days or even weeks it usually takes.

Since blockchain technology can be utilized in order to keep a record of each vehicle component’s origin, your clients can be assured of guaranteed quality when ordering replacement parts and very precise notifications in case their vehicle is part of a recall group by the manufacturer.

Lowering Risk of Auto Financial Frauds

The automotive finance sector is another area where blockchain technology holds huge potential for car dealerships.

The existing methods of payment for dealers, spare parts suppliers, and automotive OEMs can take days or weeks to complete, as payments being held up at various checkpoints is a common occurrence. On the other hand, a payment framework that works using blockchain tech can complete monetary transactions in minutes or less, thereby relieving huge financial strains that can measure up to millions of dollars.

Auto majors such as Toyota are already working on building a platform powered by blockchain, in partnership with banks, trade associations, IT firms, and financial institutions. Platforms such as these can connect buyers, sellers, dealers, and regulators in a secure and transparent way.

Using blockchain technology, the financing part of the car buying process can be simplified, since some of the required documentation and many validation steps can be made less complicated. In fact, some practices can even be eliminated altogether, making the customer journey painless and hassle free.

Efficiency in Registration and Title Processing

Thanks to blockchain, you won’t have to wait several days for lender confirmation of title transfer.

Instead, a car can be remarketed right away and the registration data handled in a streamlined and safe manner. This will arguably save auto dealerships a significant amount of time and result in substantial cost savings as well.

A blockchain solution could easily replace multiple software systems and online forms for in-state and out of state registrations by connecting all parties involved in the sale and transfer of vehicle ownership, which includes the seller, the buyer, insurance agencies, the government and third party VIN databases.

Most importantly, all of this can be done in a secure and transparent way at lightning quick speeds.

Subscription Car Ownership

A payment program based on blockchain tech could make it possible for car dealers to run a ridesharing or a subscription service in their surrounding regions with ease.

Most vehicles spend considerable amounts of time sitting idle, and with average transaction costs hovering around the $35,000 mark, options such as vehicle subscription services do make a lot of sense in today’s world.

In time, as cars become ever more connected, blockchain technology can enable auto dealerships to pre-emptively reserve the right vehicle for subscription services or rental cars, since driving habits and ownership behaviors can be recorded.

For more information on how blockchain will improve auto dealership performance, Contact Us.