The bank has helped more than 800 car dealers receive real-time funds after a pilot program in June. US Bank said in the press release that it expects to roll out the solution to more merchants in the coming months.
“While the traditional ACH payment method used to fund auto loans can take several days — particularly when sales are made after hours — real-time payments to merchants are fast, secure, and available seven days a week, including holidays,” the release reads. “Auto dealers using real-time payments gain a competitive advantage through better control over cash flow and improved contract-in-transit metrics, a key performance indicator for auto dealers and their employees.”
John HyattPresident of dealer services at the bank, said in the press release that car dealers’ interest in the solution has “grown rapidly” in recent weeks, with many dealers being particularly excited about closing deals in the evenings and weekends.
Auto lenders are facing a credit crunch, particularly those lending to the subprime market.
Continue reading: Credit crunch looms for auto lenders as paycheck-to-paycheck pressure mounts
credit acceptance, a company that helps auto dealerships provide financing, last week warned of near-term prospects for timely payments on recently renewed loans. The company said its metrics showed a drop in collection rates to 67.1%, compared to its forecast of 67.6%.
That forecast applies to consumer loans issued this year, the company said, adding that the decline would hurt cash flow.
Meanwhile, prices for both new and used cars hit record highs in June, according to the Kelley Blue Book, which showed a new car sold for an average of about $48,000 in the US, while a used car is priced at about $28,000 .
See more: The snarl in the supply chain will keep auto prices high, says a Morgan Stanley analyst
These rising prices are primarily due to problems in the global supply chain hampering deliveries from automakers like GM and Toyota.