With the demand for electronic contracting grows the need for F&I to get involved in the transaction earlier. 
 - Illustration by Feodora Chiosea via Getty Images

With the demand for electronic contracting grows the need for F&I to get involved in the transaction earlier.

Illustration by Feodora Chiosea via Getty Images

According to Cox Automotive’s 2019 Car Buyer Journey research report, your customers are moving through the shopping process faster than ever before as online engagement grows.

The percentage of consumers who complete the entire purchase process online is still relatively small. But this trend is rapidly changing as the auto finance sector has begun moving toward traditional paper consumer sales and financing documents being replaced with electronic documents.

Meanwhile, there are some sticky issues which must be addressed by the dealer and the finance source to ensure compliance.

Time Really Is Money

Clearly, one of the driving factors in econtracting is shortening the customer’s time in the F&I office. While that goal is front and center, the F&I manager also must keep a firm grip on compliance. You are required to present 100% of the dealership’s F&I products to 100% the customers 100% of the time. The crux of this issue lies with the number of products available on your menu.

We’ve all been to the restaurant with a menu the length of a short story. It’s overwhelming to say the least. These establishments are often trying to be all things to all people, from picky kids to gourmet foodies.

A more focused restaurant that specializes in a regional cuisine in a middle-class neighborhood where the bulk of its customers’ average age is 44 years old does not feel so burdened. A simple, single-page menu will suffice.

The same approach should be applied to your dealership. Know your customer base and the type of F&I products they need. Tailor the menu to achieve the best possible product penetration with four to six products that match the customer demographic. This approach automatically speeds the F&I product review while maintaining the 100% requirement.

Management should focus on training the sales force and F&I team to work as a cohesive unit.

Effective Training Builds Opportunities

With a strong menu in place, management should focus on training the sales force and F&I team to work as a cohesive unit. This cohesion means including the F&I manager early on in the sales process.

The F&I manager can easily conduct an initial customer interview and obtain all the information needed to structure the loan. If the early stages of the deal are being executed online, the F&I manager can be included in the discussion via email or text. Including the manager online speeds the process and enables a compliant presentation in the most efficient way possible.

While the sales representative continues the in-person or online discussion with the customer, the F&I manager can begin to secure the loan. By working together, you can reduce or eliminate downtime for the customer. The F&I manager is also afforded valuable time to work with the lender to accurately complete the electronic contract transactions.

Training also comes into play when considering econtracting compliance complexities. Whether using in-house technology, a third-party system, or a system supplied by a finance source, it is critical that F&I be well-versed and able to answer the customer’s questions. Data security is a key concern for customers of any business.

You must also be confident your dealership and each of your finance sources is complying with regulations such as E-Sign, formally known as the federal Electronic Signatures in Global and National Commerce Act. Compliance with state laws, including the Uniform Electronic Transaction Act, is also required.

The trend toward econtracting certainly has its risks — and opportunities. Successfully navigating this trend requires reliance on some of the same tried and true practices which should already be in place.

Know your customer, train all teams to work together, and maintain compliance above all else. Operating from this perspective should result in a happy customer and increased F&I returns.

Steve Roennau is vice president of training and compliance for EFG Companies. 

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