March 2008 - Feature
Unlocking e-Contracting’s Potential
By Kevin Kopp
Despite the promises over the last few years about the eventual coming of e-contracting, most F&I managers still use those archaic dot matrix printers. So what’s the holdup? Well, the industry is in need of quite a few “-tions,” namely integration, standardization and cooperation. These three needs must occur at various degrees between third-party providers, lenders, government agencies and dealerships. But in order for this to happen, it must become a valued part of the sales and F&I workflow. It must also meet each lender's compliant document requirements.
The term “e-contracting” has been a buzzword for some time, but current paperless processes are being performed with widely varying degrees of automation. There are legally prescribed document format types that can only be delivered via physical paper. There are also lenders that will not accept electronically generated documents. On top of that there there are dealerships that are reluctant to accept major process changes.
The benefits of e-contracting have been well publicized. For dealers, e-contracting promises to eliminate one of the chief complaints among their customers: the time it takes waiting to get into the F&I office, as well as the time spent in the F&I office. Expeditious loan closings via one-click document production (where the documents are produced and filed properly) offer greater opportunities to improve a dealership’s CSI. In addition, the possibility of the customer walking out of the dealership with a more uniform, professional-looking set of sales and loan documents will definitely boost the dealership’s image.
Other benefits include faster funding since e-contracting aims to reduce document errors. There are also cost savings, including the elimination of delivery costs. It also promises to make securitization easier, as well as streamline servicing by creating cleaner loan packages that the lender can electronically vault.