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BMW Dealers Test E-Contracting

July 2010, F&I and Showroom - Cover Story

by Justina Ly

Prestige BMW’s Brian Blum with BMW Financial Services’ Shaun Bugbee.

By all accounts, e-contracting’s paperless future should have been realized long ago. Unfortunately, any advances it has made in recent years have been muted by the economic downturn. But with the industry reemerging, BMW Financial Services, which began rolling out its e-contracting platform last November, believes that future might be now.

Brian Blum got his first peak at the new e-contracting system about nine months ago. The business manager at Ramsey, New Jersey-based Prestige BMW was one of about 50 people, mostly personnel from other dealerships, who were flown out to the captive lender’s Ohio-based facility.

“They gave us a tour of the facility and sat us down with individual credit analysts and department managers,” recalls Blum, whose dealership was first turned on to the system last November. “We learned how they are approving deals and it gave us an idea of their current lending appetite — what you should steer away from and what structure they are comfortable with.”

Sometime between meeting with credit managers and sitting through the company’s review of its F&I products, Blum was shown the testing lab where the captive’s retail solutions are put through their paces.

“It was a very impressive tour,” he says. “I know how cautious they are when launching something, so I knew [its e-contracting system] had been through tremendous hurdles before an end-user like me had a chance to use it. What impressed me was how interested they were in our feedback and how that feedback was actually utilized.”

Prestige BMW was one of 28 dealerships in Illinois, Maryland, Michigan, New Jersey, New York, Pennsylvania and Texas to be plugged into BMW Financial’s new e-contracting solution, which the captive lender spent three years developing.

“To say the project has been challenging would be an accurate statement,” says Shaun Bugbee, a sales and marketing executive with BMW Financial Services. “But at the end of the day, we feel it’s the wave of the future and how transactions will be executed at the point of sale. So, we didn’t look at it as a risk, but more of an investment.”

Based on a study of New Jersey dealerships, the system has so far reduced the average 30-minute transaction time by 30 percent. Bugbee does throw out one caution, however: “I think we will see some regional differences. So, before we’re claiming a victory of 30 percent across the board, I’d like to see how the system performs in different markets.”

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