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E-Contracting’s Missing Link

Integration has been one of the obstacles in the way of the industry’s push toward e-contracting. One technology expert says that will no longer be the case going forward, especially for product providers.

September 2011, F&I and Showroom - Feature

by Mark Virag

The auto finance industry’s decade-old push toward e-contracting has served as a nice template for F&I product providers. However, there is one step providers may be able to skip, a prospect that could speed up the delivery of the paperless future both segments envision for the F&I office.

The F&I product segment is where the auto finance industry was a decade ago in its drive toward e-contracting. Web portals that allowed dealers to submit credit applications ruled the day, as they do currently for today’s product providers. Advancements in how business applications are designed and distributed, however, are speeding up the F&I product industry’s progress. That progress also raises the prospect of F&I managers being able to book all product and finance contracts without ever having to leave their dealership management system (DMS).

The Birth of e-Contracting

The concept of e-contracting was born in the late 1990s. At that time, finance sources began introducing online credit apps. It wasn’t until secure Internet connections were developed that these online credit systems flourished. One of the first companies to come online with such a system was Household Finance Superhighways. Like other trailblazers, the company developed a single-lender Website that could receive credit applications.

These sites also became great dealer communication platforms for finance sources, especially for captive finance companies. Aside from being able to distribute new rates, captive finance companies used them to deliver service bulletins and host loyalty-building dealer contests. The goal was to load these credit portals with as much content as possible to keep their dealers from visiting their competitors’ sites.

The single-lender sites worked great, but they were inefficient. F&I managers were forced to learn procedures for submitting credit apps for each platform. This is the stage at which product providers now find themselves, and the challenge will undoubtedly be the same.

The main problem with the portal sites is that F&I managers must rekey basic information about the customer for each site they visit to price a product. And once they’ve done that, they are forced to switch back to the DMS, input the products selected and then check the figures before printing the finance contract. It’s true that most F&I professionals can price products by memory, but that may not be feasible in the near future as the list of rated F&I products continues to grow.

The biggest issue with having documents prepared on separate systems is the lack of integration and crosschecking. There are provider portals available today that can read from the DMS, which eliminates the need for rekeying. However, only a few of these platforms can push product information back to the DMS. Linking through certified and even “hostile” integration has been a great short-term solution, but there is a better way.

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