One of the processes to draw ire during examinations in the past year by the Consumer Financial Protection Bureau was refunds associated with voluntary protection products.

This week, Onbe published its 2024 Auto Finance Payments Survey, exploring consumers’ refund preferences.

When receiving payouts across the automotive ecosystem, from overpayment to guaranteed asset protection (GAP) insurance refunds, Onbe indicated car buyers and lessees look for payment choice and a variety of digital payment offerings.

Beyond appreciating the convenience of their preferred payment options, Onbe explained consumers perceive digital refund experiences as more transparent, with 67% of survey respondents agreeing that digital payouts would positively impact their trust in their automotive financing provider.

Consumers are often surprised to receive automotive financing refunds, with Onbe’s study discovering that 62% of respondents have felt unsure whether they were owed a refund at the end of their installment contract or lease term.

Digital-first solutions for both payments and communications make the auto financing journey easier to understand, according to 73% of auto consumers in Onbe’s survey.

By modernizing the refund process to include an explanation for the payment along with instant and secure redemption options, Onbe said finance companies can provide buyers with clarity and instill trust during a critical point in the financing journey.

“When buying or leasing a car, auto consumers deserve fast, secure and choice-driven payment experiences at every step of the process, including when they are owed a refund,” Onbe chief client officer Melissa Hentschel said in a news release.

“Switching to digital solutions helps automotive lenders simplify the refund process and promote clarity for their customers while reducing the cost and complexity of payout administration and keeping up with the evolving regulatory landscape,” Hentschel continued.

Additional findings from Onbe’s 2024 Auto Finance Payments Survey included:

—60% of consumers have received a refund for overpayment during the auto loan payoff process, while 47% have received a refund for GAP insurance.

—88% of respondents said a digital payment would be more convenient than getting a check in the mail.

—71% said speed, accuracy and convenience are most important for auto consumers when receiving a refund payment related to their contract.

The 2024 Auto Finance Payments Survey is the seventh iteration of Onbe’s monthly payments market research survey. The purpose of this survey was to learn how consumers prefer to receive automotive refunds and to better understand the challenges they currently face when receiving these payments.

Respondents were asked to complete a survey with 23 questions in April. Onbe received a total of 1,056 responses with a 32% qualifying rate, collected from across the United States and from demographics reflective of national diversity. Respondents must have been at least 18 years of age to qualify for the survey.

Onbe noted another piece of qualifying criteria consisted of respondents needing to have purchased or leased a vehicle and receiving both funding and a refund from their auto finance provider.

“Leveraging instant and choice-driven digital solutions empowers consumers with simpler, clearer payout experiences, leading to improved satisfaction at a moment worth celebrating: the end of a financing term,” Onbe said.

“Rapid growth coupled with recent advancements in loan processing brings a greater need for solutions to process refunds and other payments quickly and compliantly,” Onbe continued. “Offering context-driven payouts with in-demand choices will be key for auto loan providers to streamline their payment operations while delivering the transparency and convenience buyers and lessees expect.”

 For more information about Onbe’s automotive payment solutions, visit www.onbe.com/industries/automotive.