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Navigate the Three Pillars of Econtracting

Successfully adopting econtracting requires dealers to determine whether the opportunity exists, install the necessary infrastructure, and change your culture and training to match the new technology.

December 2017, F&I and Showroom - WebXclusive

by Jason Barrie

Electronic contracting offers a host of potential benefits to dealers, F&I pros and car buyers, but adoption requires planning, infrastructure and training. Photo by Peyrl Herrera
Electronic contracting offers a host of potential benefits to dealers, F&I pros and car buyers, but adoption requires planning, infrastructure and training. Photo by Peyrl Herrera

Over the past five years, our industry has felt the seismic shift of a new generation of car buyers. Millennials, as they have been called, come to the dealership with their eye on a faster, more connected and more digitized car-buying experience. Through our research, we have revealed two critical items we need to consider:

  • Half the time spent at the dealership during the purchase process is devoted to negotiating or doing paperwork, resulting in a 49% satisfaction rate for how long the purchase process takes.
  • Financing paperwork and negotiations are the top two areas that took longer than expected for customers.

These stats shouldn’t surprise us. Many dealerships continue to rely on long and laborious paper contracts as well as the traditional and error-prone approach of manual data entry and calculations. However, with more millennials becoming car buyers, and older generations also demanding a better online and instore shopping experience, now is the perfect time for dealers to expand their technology capabilities and streamline the often consumer-dreaded F&I process. A perfect way to achieve this? Incorporate electronic contracting into the process.

It's Electric

So what exactly is electronic contracting? Econtracting enables a paperless experience in which dealers digitally verify contract fields, consumers and dealers sign digitally, and contract data is digitally transmitted to lenders and aftermarket providers.

By investing in econtracting, dealers and lenders can help to accelerate the final steps in the car buying journey. For dealers looking to digitize the contract component of the F&I process, it is important to consider the following three core pillars of econtracting.

Pillar No. 1: ‘Sizing’ the Opportunity: Before implementing econtracting at your dealership, think about the number of lenders and aftermarket providers you already do business with. Then, ask yourself, “Do we have enough opportunities?”

Six years ago, on average, one lender was available for every active dealer utilizing the Dealertrack econtracting solution. This ratio has since jumped to 5.8 lenders per dealer. We are now seeing both lenders and aftermarket providers participating on our econtracting platform at a much higher rate than before, ultimately helping to create a more connected F&I experience that benefits dealers, lenders and customers.

Pillar No. 2: Infrastructure: Is your dealership set up with the proper hardware to support econtracting? Do you have Wi-Fi enabled in your showroom or F&I department to facilitate iPad or tablet signing solutions? These are crucial questions you must ask yourself when making the move to econtracting. Having the correct infrastructure in place will position you for successful implementation.

We have seen a significant growth in total number of contracts processed through tablets vs. a traditional “wired signature pad,” with 20% of contracts being processed through tablets year-to-date.

Pillar No. 3: Culture and Training: You’ve sized the opportunity and your infrastructure is in place, but in order to reap the full benefits of econtracting, you must ensure that your staff is fully onboard with the change and trained on the new process. Change can always be hard for dealership staff. Providing your staff with ongoing training, coaching and education to confidently leverage econtracting will be key to maintaining a positive work environment and implementing the new technology.

By sizing the opportunity, ensuring the right infrastructure is in place, and training your staff on the new process, econtracting can help you to not only streamline the F&I process, but also create that transparent and interactive experience millennials have come to expect.

Just recently, there was a thread on Facebook in which dealership personnel debated the value of econtracting. The benefits were flying: improved CIT, higher CSI, cost benefits of reducing paper, and a few more to boot. But it’s so hard to change. Remember when we were faxing our credit apps to our finance sources?

As our industry incorporates new technology to support our dealership process, and the benefits are clear for the dealer principal and F&I personnel, I expect econtracting to evolve from a buzzword to a reality.

Jason Barrie is associate vice president of market performance for VinSolutions and Dealertrack F&I.


  1. 1. Richard Blizlichk [ December 28, 2017 @ 02:33PM ]

    Smart Cash thru Ally = less key strokes and same day money.


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