20 March 2019
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
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
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.
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
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.