MUMBAI: Auto financiers are pushing for innovation in lending, with a shift towards embedded finance and partnerships instead of generic EMI products, even as global markets adopt integrated digital credit at the point of sale.While nearly eight out of 10 new cars are being financed, car dealers conduct sales based on on-road prices. The financing is a separate transaction.Speaking at the Federation of Automobile Dealers Association (Fada) 5th Finance and Insurance Summit in Mumbai, Rajan Pental, executive director at Yes Bank, said that there was a need to make the purchase of a car seamless.“While the industry has been providing auto loans as an instalment product, we have not yet succeeded in developing an embedded product.” Pental said that today the customer walks in with full knowledge of the car and its features, and the multiplicity of lenders delays the transaction.In developed markets, lenders and OEM captives routinely offer fully digital, embedded credit at the dealer or through online configurators, with instant decisions, e-sign, and funding tied to the vehicle order. In contrast, India’s auto finance market remains dominated by traditional loans, with leasing accounting for around 1.5% and subscription around 0.1% of the market. Pental urged the industry to go beyond ex-showroom pricing and offer schemes designed for every pin code.Raul Rebello, MD and CEO of Mahindra Finance, said that the industry achieved scale, and the gap between rural and urban sales was disappearing.C S Vigneshwar, president, Fada, said that finance and insurance business were the “load-bearing walls” that were keeping auto dealerships viable. He said that in wholesale finance, dealers expect more transparent, demand-led funding and quicker transmission of interest rate reductions. In retail finance, he said there is a need for more robust used-vehicle funding solutions and smoother reconciliation processes.