E-contracting has become more important to dealerships and car buyers in the past few years. Environmental awareness has a lot of sounds, but it also has a lot of other advantages that can put car dealers ahead of the competition.
1. Speed up the process of funding
Getting paid takes much longer for dealers who use old paper contracts than those who use e-contracting services. After an e-contract is sent to a financial institution, most deals are funded within 24 to 48 hours. Some people will send the money as soon as they send the form.
The time required to ship and process paper means that paper contract terms take much longer. If dealers use traditional contracts, they might not get paid until a week or more after the consumer has picked up the car. When funding is late, it’s a big problem for car dealers that need that cash to make floor plan payments.
2. Lessen dealers’ interest in floorplans
Most financial firms need a floor plan to be paid off within three and seven days from the date of financing. Because e-contracting shortens the time it takes to produce a car, payoffs can be made sooner. This means the car will spend less time on the lot, where the interest can be added.
3. Improve efficiency and reduce delivery times
Digital tools can cut the time required to do paperwork each week by hours, speeding up the process of closing a deal. Car buyers don’t want to spend more time waiting for paperwork to be processed at the dealership. On average, it takes three-hour shifts for a customer to purchase a vehicle at a dealership.
With electronic contracting, dealers can skip steps that aren’t necessary by importing customer information from their CRM or DMS into all shapes needed to close the deal. With a digital signature pad, the buyer and the co-buyer only have to sign it once. This makes the sale go faster.
4. Improve your accuracy
Since there aren’t as many forms to fill out for digital contracts, salespeople can concentrate on getting the customer contact information correct the first time. Your CRM or DMS processes can be used to find information about a customer that can be used to start making a credit application, which can then be turned into a having-to-work car deal with no problems.
5. Save money by not using paper forms.
The bank may request the dealer to start over when you print a form wrong, miss a fingerprint, or sign in the wrong place. So much cash is spent on forms with mistakes that must be thrown away. Companies like Dealertrack and RouteOne that make software for e-contracting now work with more than 7,400 lender partners and add more all the time.
Even vendor management systems are getting menus for e-contracting. Digital tools are now easy for car dealers to use daily. E-contracting also saves money on maintenance and toner for printers.
6. Don’t worry about contract supplies running out.
With digital contracting, paper bank forms and documentation for aftermarket products are no longer needed. Most e-contracting companies let dealers handle extras like GAP insurance, tire and wheel safeguards, and extended warranties.
Nothing is worse than being in a rush to close a deal and finding out you don’t have the right paperwork. The real value is on hold while you get more, which annoys the salesman and the customer waiting to get their new car. E-contracting can keep dealers from having to deal with this problem at all.
7. Lower shipping costs
Sending out a customer’s contract costs money, but the costs add up quickly when you think about how many deals have to be redone because of dealer mistakes. Dealers have to ship things, but e-contracting can make it much cheaper.
8. Make it simpler to remain organized.
E-contracting will save time and space on filing and makes it less likely that customer paperwork will get lost. When you store car deals digitally, you can get the information you need from any mobile device or computer at the dealership as long as you have the right software.
9. Improve security
Since all real financial companies offer e-contracting, they take strict steps to keep sensitive information safe. Keeping deals and letters of credit reduces the chance of identity theft, and make sure you obey the FTC’s Red Flags Rule.
10. Increase overall customer satisfaction
Ratings are very important to a dealership’s success, and the delivery process greatly impacts how happy customers are. Customers spend much less time in the business office when they use e-contracting. Less than half of people (46%) are happy with how long it takes to buy a car, based on the Cox 2018 Car Buyer Journey.
Staying competitive is always hard, but keeping your car dealer as efficient as possible can help. It’s not always easy to change processes, especially when you think everything is going well. Financial firms will always move toward digital platforms. That’s a fact.
It saves them money and needs to be appealing to people who want to buy a car online. Once you invest the time to implement automation such as e-contracting, you will significantly improve your dealership’s profitability, customer satisfaction, and overall performance.