Good technology simplifies. It creates efficiencies in process, and expands the possibilities of increased profitability — in the short term and long term. As critical aspects of the automotive retail workflow evolve with technology, dealerships and the lenders they do business with are beginning to see these improvements come to life, especially in the area of electronic contracting. From data verification to contract review, signing, approval and funding, it’s this specific application of technology that accelerates, and streamlines, the final steps in the purchase journey. Indeed, according to recent Dealertrack surveys, 98 percent of dealer personnel using electronic contracting plan to continue to use the software, and 93 percent would recommend eContracting to their peers.
Here’s how it works, and what you need to know:
What Exactly is eContracting?
Electronic contracting is the digital creation, validation and execution of an automotive vehicle purchase contract, along with an online submission process between dealer and lender. It replaces the traditional and mistake-prone approach of manual data entry and calculations, paper contracts with “wet” signatures, not to mention overnight delivery of funding packages. eContracting eliminates virtually all of these issues, and as a result can significantly reduce the amount of time it takes to submit a contract ready for approval and funding. Originally established in 2002 by Dealertrack, it’s a perfect example of how technology creates workflow efficiencies within the automotive retail process.
How eContracting Works
Take a look at those long printed contracts the dealership must use, and imagine an electronic replacement easier to navigate, sign and process. That’s the contract part of eContracting. Now consider the number of documents included in a funding package, and replace your delivery service with an electronic connection to the lender that ensures contract accuracy prior to submission so the deal can be funded as quickly as possible. It all works thanks to four key functions:
- Software as a Service (SaaS): eContracting has virtually no hardware cost or investment
- Integration with common dealership DMS and CRM platforms
- Digitization of the contract and other ancillary documents
- Capability to apply eSignatures to an electronic contract
Benefits of eContracting: Fast Funding
A key benefit to eContracting is the speed in which it handles the contract and funding process. In fact, in some cases funding can occur as fast as the same day – compared to the traditional process that takes days or weeks. That’s critical for dealerships, because the speed of funding can have a significant and positive impact on cash flow and floor planning, as well as reduce administrative expenses.
Benefits of eContracting: Accuracy and Efficiency
Few things are as frustrating and time-consuming as mistakes and missed signatures. That’s where eContracting is best, streamlining the review process and flagging errors prior to the dealer submitting the contract. Contract information is verified before the customer signs, saving an important step or two with a customer who only wants to get the keys and enjoy their new ride. Once validated, review and signing is much more efficient. Add to that the ability to leverage eSignature technology, along with mobile tablet flexibility, and the process becomes faster, convenient and customer-friendly.
The Future of eContracting
As dealer and lender adoption of eContracting increases, so does the volume of contracts being processed. In fact, industry media forecast that eContracting will be available in 80 percent of all U.S. dealerships by 2020 – a sign, perhaps, that the technology is effective at speeding process and creating efficiencies. As we head into a new sales year, finding those efficiencies is more important than ever.