You Are Missing Out on These 4 Benefits of eContracting
- With today’s digital world, eContracting is becoming more popular.
- Unique benefits to ditching the paper deal.
Digitization has created new dealership efficiencies and improved processes. However, one area that has resisted the digital change is funding a deal. When you submit paper deals, the contract could be in transit for a week or more. There are often missing signatures or incorrect forms and your interest expense climbs due to the process taking so long. In today’s world, you need to do everything you can to save money, but looking for cheap, quick fixes sometimes means poor customer experience. What you need to find is a solution that helps you save money and still properly service the customer.
Submitting contracts electronically accomplishes those goals.
The issue is many dealers are hesitant to adopt eContracting processes. While it may seem like change will disrupt your daily operations, you are missing several benefits by not adopting eContracting.
- Saved Money
Floorplan expenses are on the rise. In the last 20 months, the Federal Reserve has increased its benchmark six times. You pay interest on a vehicle every day it goes unfunded, even if it is already off your lot. If the average deal takes five days to fund, multiplied by the number of cars you sell every month, the amount of interest expense adds up quickly. When you eContract, you could get funded the same day. Not only are you paying less interest, you are saving on shipping costs by not mailing every deal via FedEx, meaning you keep a higher cash balance. You could reinvest these savings on new technology, building updates, and a more complete inventory.
- Saved Time
How long does it take for your business office to package up a deal for funding? How long does it take for a funded deal to be paid? Days? Weeks? All you can do is sit and wait. And what if there was a mistake and you have to send it again? With eContracting processes, your funding can go from days to hours. Some lenders are even investing in their own technology so it never has to touch human hands. You submit the contract and, as long as it meets the necessary requirements, it is funded immediately. Nelson Andrews, dealer principal at Andrews Cadillac, has adopted eContracting processes in his store and is getting his deals funded in four hours or less.
- Stronger Relationship With Lenders
Lenders are looking for more ways to connect to the customer during the car-buying experience. They are getting into the game by providing loan payment services at the point of sale. This exposes the lender to the customer and gives them more knowledge of who they are financing with. However, this cannot happen without the dealership’s help. The F&I manager can electronically show the customer which lender will partner with them to establish automatic payments and manage their loan. Lenders who have adopted eContracting processes also give preferential treatment to dealerships who submit deals electronically because they fund digital deals faster than paper contracts.
- Enhanced Customer Experience
You already provide your customers with a stellar experience, but it’s time to take it up a notch. If you can get a deal funded while the customer is still in the dealership, the lender can set up their auto-pay account before they leave with their new vehicle. Plus, with an electronic forced march to capture all signatures the first time, customers won’t have to return due to human error. A good experience can create customer loyalty with your dealership, turning your buyers into customers for life.
eContracting is becoming the new normal. Dealerships and lenders alike are jumping on board. Faster funding for you, electronic processing for the lender, and an enhanced customer experience. eContracting is a technological advance where everyone wins. With the world becoming more electronic by the minute, adopting an eContracting process using the right technology is an economic no-brainer.
Industry experts are predicting that used vehicle demand (and prices) likely won’t start coming down until spring 2022 at the earliest.