One thing we learned over the past year is that all businesses, from restaurants to retail, mom and pop shops to large corporations, all had to make changes to their everyday business model. We watched restaurants and bars stay afloat by increasing their to-go options. We witnessed an increase in the grocery store click-list orders. Consumers felt more comfortable with the drive-up service as opposed to doing their own shopping. Food delivery services such as DoorDash, Uber Eats, and GrubHub saw their business explode tenfold due to the demand from consumers to have their take-out food delivered. Video conferencing services experienced a huge uptick in subscriptions as businesses and families were purchasing subscriptions to stay connected with colleagues, consumers, and family members.
Dealerships have become easy targets because ID thieves figured out they were willing to deliver a vehicle without ever setting eyes on the consumer.
Dealerships were no exception to these changes. Dealers across the nation were deemed a non-essential business and therefore had to establish a business model that would allow them to continue with their day-to-day business of selling cars. The business model had to include a digital process for out of dealership deliveries.
Some dealers were ahead of the 8-ball, as they already established a process for out-of-area deliveries — when a dealer sells a vehicle to a consumer who is outside their geographical radius. These dealers were able to modify their out-of-area delivery process to fit a model for an out-of-dealership delivery process. Some of our clients invoked our help to create a digital delivery process. Taking our existing model, we modified the recommendations to fit a digital process for out-of-dealership deliveries.
Before I get into the nitty-gritty of the recommended digital delivery process, it is important to understand the need for such a detailed process. We all know identity theft is running rampant across the nation. Identity thieves have become more brazen in their attempts to commit fraud. In recent months, dealerships have become easy targets because ID thieves figured out they were willing to deliver a vehicle without ever setting eyes on the consumer. It made it possible for thieves to illegally obtain a vehicle in a victim’s name.
Scrutinize Credit Application, Credit Bureau, Red Flags, and OFAC
First, I recommend that any consumer interested in applying for credit do so via online through the dealership website or third-party portal. The online submission is more secure and gives you permission to pull the customer’s credit. Once the credit application is in hand, vet the credit bureau, Red Flags report, and OFAC for discrepancies. Then, fly speck the reports and address any potential discrepancies. And be sure to print any confirmation pages from Red Flags and OFAC and place them in the file for confirmation.
Next, obtain a legible copy of the consumer’s government-issued ID. Review it for signs of alterations. If dealing with an out-of-state ID, vet it against images for that state either through web searches or the NADA Titling Guide. Also, ask the consumer to take a picture of themselves holding their identification, and make sure to print it out and place a copy in the file for confirmation.
Google Earth is your Friend
A dealer can benefit from using Google Earth on an out-of-dealership delivery by searching the address the consumer provided. Verify the address exists and that there are no discrepancies. For example, say the consumer has a $5,000 mortgage payment, but when you Google Earth search the address and it comes back to a one-bedroom shack. The dealer may want to take a closer look and ask some questions. And be sure to retain a copy of the Google Earth search in the file for confirmation.
Out of Wallet Interview via Video Platform
During these uncertain times, we have concluded that video conferencing has become a necessity to conduct business. Take advantage of services like Zoom, Go-To-Meeting, or the like to interact face-to-face with the consumer. It is especially vital when conducting an out-of-wallet interview. Face-to-face contact with the consumer during the interview allows the dealer to observe them. Take note of a consumer who fumbles through the interview, appears to be searching for answers to questions, or is being coached by a third party. The consumer must be able to answer the four out-of-wallet questions in order to continue with the transaction. Record their answers, print them out, and retain a copy of the summary page for confirmation that the consumer successfully completed the questionnaire.
Deal is Finalized in Sales, What’s Next?
Once the deal is finalized and back to F&I, utilize a video conferencing service to contact the consumer to conduct a full menu presentation. Make sure to verbalize the base terms, offer the products, sharing the features and benefits, and disclose the final terms with products. Also, get confirmation of the products purchased and the agreement to the final terms from the consumer. Finally, prepare the paperwork and indicate where the consumer needs to sign on all documentation.
If the dealer does not have an e-contracting/e-signature system in place, I recommend they invest in a notary service to do the legwork. The dealer sends the paperwork to the notary service, and they contact the consumer to set up an appointment to sign paperwork. Once paperwork is signed and notarized, the notary service returns the paperwork to dealer. At this point, review the paperwork for consistent signatures, compare the signature against the consumer’s signature on their government-issued ID, and verify that each signature was notarized. The notary service eliminates the work for the consumer to locate a notary, and it is also an extra layer of protection for the dealer. It also makes the signing process seamless for the dealer and the consumer.
Loose Ends and Considerations
The dealer should confirm the down payment is paid via wire transfer or certified funds. The dealer may also consider asking the consumer to pay any delivery charges for vehicle. This recommendation is intended to thwart ID thieves, as they will not be willing to pay a delivery charge and have “skin in the game.”
Delivery of the Vehicle
Now that the above recommendations are taken, it is time to deliver the vehicle. Ensure the driver understands that he/she should never divert delivery of the vehicle. The vehicle should be delivered to the stated address, and if the driver receives a request from the consumer to divert to another location, the driver should immediately contact the dealer.
The past 13 months have taught us that we must adapt and overcome to stay current. As we move forward, a digital delivery process will likely become part of most dealer’s business model. Take the time to determine if the above described model fits your business. You can thank me later.
Penelope Bell is an associate with gvo3 & Associates, a consulting firm that specializes in developing and implementing a compliance management system for dealers around the country.