How Drive Now is Maximizing Profitability and Productivity with 77% Self-Service Acceptance

Auto dealerships that have adopted Buy Here Pay Here (BHPH) financing may increase their opportunity to serve consumers, but managing loan collections in-house can be complex and costly. In many cases, dealers are trying to get by with minimal payment capabilities that drain valuable time and money away from the business.

A decade ago, that was the case for Drive Now Acceptance, a used car dealership and financing company based in Illinois. In a recent webinar, we talked with Lisa Patterson, CFO and Partner at Drive Now about how the PayNearMe payments platform has transformed their business. View the on-demand webinar here.

Over the years, Drive Now has grown quickly to four dealership locations, serving subprime consumers. Much of their success is driven by being very focused on the communities they serve, helping people get a car with an affordable way to pay, and even providing maintenance reminders and short-term loans to help customers keep their car running well.

Focusing on the customer experience is essential in a business where word-of-mouth referrals are vital and competitors loom just down the street. Drive Now knew that setting customers up for success means making it as easy as possible for them to pay their auto loan—and that’s where PayNearMe came in.

Simplifying payments with self-service

Previously, Drive Now primarily collected loan payments in cash at their dealerships. For customers, that meant getting to a local office during business hours. If that was a challenge, it could mean late or missed payments. Additionally, the process was time-consuming and costly for the dealerships, even if it kept the business well-connected to their community.

A more efficient solution was on the horizon. They partnered with PayNearMe to implement an innovative payments platform that gives customers the ease and convenience they need. For example:

• Cash at retail. Payment options include cash at retail locations, so people can pay their auto loan at stores they already frequent (e.g., Walmart, CVS, 7-Eleven, Walgreens) instead of having to go to the dealership. About 3% of Drive Now’s customers now use this option. In the digital age, it may seem surprising that cash is still popular. But lower income and unbanked consumers often prefer that option for paying bills. In fact, our 2024 consumer survey found that of those consumers that pay bills with cash, a whopping 84% consider it very important or important to be able to pay with cash at a retail location during checkout.
• Digital payments. Customers who prefer digital payments now have flexible options to pay with cards or mobile wallets (such as PayPal, Venmo, and others) in a few taps on their smartphone. Drive Now is also seeing increased use of Apple Pay and Google Pay, with one in four of their customers using this payment method. Our research underscores the demand. Nearly 60% of consumers said they would be very likely or likely to pay their loans with digital wallets.

Drive Now has found the PayNearMe payments platform a ‘phenomenal transformation’. Customers love the simple and smooth process, with 77% now using self-service to pay their auto loans.

Offsetting market impacts with payment flexibility

With ongoing inflation in recent years, the automotive industry has faced an affordability crisis. Drive Now wanted to continue offering good-quality used vehicles, but being in a subprime market, they needed new ways to make it easier for customers to afford monthly payments.

With the PayNearMe platform, the company was able to implement new options, including weekly and biweekly payments to help borrowers more easily manage cash flow. And splitting bill payments is increasingly appealing to consumers. In earlier PayNearMe research, 54% of people surveyed said that splitting payments instead of one monthly sum would make it easier to pay on time.

Amplifying efficiency and productivity

The shift to self-service payments not only makes life easier for customers, it helps increase productivity for sales and collections staff at Drive Now dealerships. Previously, with their offices as a hub to collect payments, customers streamed in frequently, sometimes distracting staff with other needs or complaints as well. Drive Now teams can now stay focused on what they need to do.

The payments platform also frees up staff time with automated workflows, such as:

• Personalized links to self-service. To promote self-service usage, customer service staff can push a personalized link via email or text message, enabling a customer to jump directly into their account in the payment flow. There is no need to remember login details or account number, which makes it seamless to pay their loan using their preferred method. 43% of Drive Now customers are taking advantage of their personalized links to pay their loan via self-service, which takes considerable burden off the back-office.

• Digital reminders. The company also automates digital reminders to send personalized links when a payment is due. It provides valuable assistance that customers appreciate and can help improve payment performance. A PayNearMe survey found that 47% of people surveyed say that receiving a text message or email reminder when a bill is due would make it easier to pay on time.

• Autopay options to drive adoption. Autopay enrollment has jumped significantly now that the dealership can offer more flexible choices. More than one-third of their customers are now on autopay, thanks to the ability to schedule a preferred due date, split payments, vary payment types and more. These options are key drivers of adoption; we’ve found that 65% of consumers would be more likely to enroll in autopay if it offered more scheduling flexibility.

• Streamlined reconciliation. With their previous payment processor, Drive Now’s accountant had to spend 3-4 hours every day wading through convoluted reports that had very little data. With PayNearMe, it takes them less than 30 minutes to reconcile, with detailed reports that simplify getting everything into their accounting ledger. 

Being able to free up the accountant’s time is a significant win. Drive Now can close their monthly books 7-9 days earlier than before.

Lisa Patterson, CFO and Partner, Drive Now

Lowering costs with less calls and overhead

Keeping customers and employees happy is always important, but reducing the overall cost of payment acceptance is critical. With PayNearMe’s self-service payment options, Drive Now is saving time and money in measurable ways that impact their bottom-line.

Here are a few examples:

• Minimal calls. Even during the company’s first 120 days with the new payments platform, they noticed a substantial difference. The phones were quiet. Management was amazed when the collections staff said they were now rarely taking payments by phone or fielding calls about issues. Payments were clearing consistently all through self-service channels. Consider that agent calls are up to 80x more expensive than self-service interactions (according to Gartner) – that’s a monumental savings for the business. And with the time-savings, Drive Now has been able to refocus staff on more complex cases, building rapport with customers who need more help to pay their loan or need additional financing.
• Reduced delinquency. The past five years have been the most profitable so far for Drive Now, but like any lender they have to deal with delinquencies, especially in a subprime market. With much of the collections load shifted to self-service, staff now have more time to engage at-risk borrowers to work out payment plans and help avoid costly charge-offs.
• Lower staff costs. With self-service cash at retail, the dealerships were able to eliminate having cashiers at each location. Drive Now has grown 17% in the past five years, yet they haven’t needed to hire more collectors. With very few customer calls to pay by phone, and less need for outbound collections, the company is enjoying growth with greater profitability, without the offset of added overhead.

We’re well over $400,000 in annual savings because we switched to PayNearMe.

Lisa Patterson, CFO and Partner, Drive Now

Advice for billers on the fence about change

Implementing a new payments platform can seem daunting for any organization, and many are resistant to change. Before partnering with PayNearMe, leaders at Drive Now were concerned about causing a major disruption in their operations. But our approach eliminated their concerns.

PayNearMe’s integration team collaborated closely to make the transition as seamless as possible. They took time to listen and understand the client’s needs, and provided informative guidance and expertise to ensure a smooth implementation. In particular, Drive Now appreciated that the team gave the same focused attention to a smaller company as they would for big organizations.

And the results have been phenomenal. With nearly a decade on the platform, Drive Now has experienced huge benefits in terms of cost-savings, convenience for customers and more strategic productivity for collections and accounting staff. Along the way, the company gets to take advantage of PayNearMe’s ongoing innovations that help minimize the overall cost of payment acceptance.

The amount of financial savings and time savings that create even more financial savings and profitability for the company has been amazing.

Lisa Patterson, CFO and Partner, Drive Now

Learn more about the partnership between Drive Now and PayNearMe. Watch the webinar and check out the PayNearMe platform with our interactive virtual demo.