Aftermarket sales are an important part of the deal process, but sometimes there is confusion about how eContracting figures in.
For each aftermarket product, there are two types of contracts: one with the aftermarket provider and another that becomes part of the lending package submitted digitally to lenders. A complete eContracting solution should give your dealership the ability to create and digitally submit both.
Let’s take a closer look at the two types of contracts.
Service contracts submitted to aftermarket providers
Aftermarket or F&I offerings include protection products for the consumer such as Guaranteed Asset Protection (GAP) waivers, debt cancellation agreements, service contracts, extended warranties, roadside assistance agreements and maintenance agreements, and other vehicle protection products such as paint corrosion warranties or tire repair warranties. These products are offered by a wide variety of providers, so it’s possible that a deal that involves more than one aftermarket add-on will require contracts with multiple providers.
When a car buyer chooses an aftermarket product with their vehicle purchase, here’s how each service contract is digitally created:
- System receives an accurate price quote and rating for a protection product from the aftermarket provider and generates the aftermarket provider contract.
- Depending on the aftermarket provider, this contract may be able to be electronically signed by the car buyer.
- Aftermarket provider receives deal data directly so they can initiate the coverage for the car buyer.
- In turn, the aftermarket provider generates an aftermarket sales contract for the dealership that becomes part of the funding package.
When a dealer rates a contract from an aftermarket provider, it’s a similar process to verifying vehicle purchase contracts. Both processes ultimately produce data that is used to create documents for the finance portion of the deal.
Sales contracts submitted to lenders
The resulting aftermarket eContracts are individual retail installment sales contracts that are handled by the lender in a comparable way to the eContract for the sale of the vehicle.
Although these aftermarket sales contracts are separate from the vehicle purchase contract, it’s ideal to be able to include them all in the funding package that is electronically submitted to the lender. Being able to submit a single, complete funding package helps ensure quick processing and fast funding for the entire transaction.
Digital solutions across the board
To maximize convenience and efficiency, look for a solution that enables you to handle all aspects of the aftermarket process in one platform, including:
- Presenting aftermarket products
- Allowing customers to make their selections
- Generating electronic contracts to be sent to the aftermarket providers
- Electronically sending the aftermarket contract(s) to lenders.
With an all-digital process, you should be able to calculate the payment for the customer including aftermarket products and store the documents within a single deal jacket, with no need to log into another system.