Tag: eContracting

Less Paperwork Equals More Customer Satisfaction

Posted on

We live in a world where purchase transactions keep getting faster and more convenient. Consumers are accustomed to ordering coffee with an app and having it waiting when they arrive, getting next-day or even same-day delivery from Amazon Prime, and pulling up to Target or Walmart to have merchandise they ordered loaded directly into their cars.

When these same consumers visit a dealership, they fully expect to discover a technology-enabled sales process that will be an improvement over what they experienced with previous purchases. The good news is that dealers are responding to this expectation, with 69% of franchise dealers adding at least one digital step due to COVID-19 according to the Cox Automotive Digitization of Online Retail Study.

How does that help? The same research uncovered that the number one benefit for car buyers of a digital process is saving time. The average amount of time a customer spends at the dealership has been dropping steadily and they would prefer to spend their time on enjoyable activities like test drives. However, the 2020 Cox Automotive Car Buyer Journey study found that nearly half of their time is spent on negotiations and paperwork, the part of the process they dislike the most.

Despite 92% of car buyers researching their vehicle purchase online, many dealerships still do not offer customers the option to sign their paperwork digitally. So even when a customer has researched and started much of their deal online, most still face an outdated paper and wet signing process before they can take delivery of their vehicle.

The pile of paperwork comes out near the end of their purchase process, which risks lowering CSI scores when the lengthy contract review and signing process takes the customer’s positive car buying experience and adds frustration.

One of the drawbacks of the paperwork stage is that it’s where any inefficiencies in the process start to snowball. If a dealership has unconnected systems that force re-entry of customer data, it’s way too easy to introduce errors and create a contract that the lender may not be able to process on first submission. If that happens, it can delay the transaction and inconvenience the customer even further.

Using a combination of desktop and mobile technology to take paper out of the sales process can make a significant difference to the customer experience. Just starting with digital review and signing of contracts can make a significant difference in the customer expereince. eContracting helps eliminate those intimidating stacks of contracts and replace them with convenient review and sign-and-tap functionality. Additional digital solutions including mobile data collection and menu technology to present aftermarket products can provide a more customer-friendly approach overall.

The digital deal addresses many of the frustrations car buyers have with the car buying process. And it’s better for dealerships as well. In fact, 77% of franchise dealers that have enabled digital contract review and signing are more satisfied with their overall digital retailing experience.

Find out more about how Digital Contracting with Dealertrack uniFI is a customer-friendly and dealership-friendly solution.

Best Practices for Remote Signing

Posted on

Dealerships have made impressive strides in responding to the restrictions imposed by CDC guidelines and social distancing rules by adopting tools that allow them to work with customers remotely. One vital part of that process is remote contract review and signing.

With a growing percentage of deals starting online, remote signing followed by at-home delivery are logical next steps to ensure convenient and socially distanced auto purchases for consumers.

Here are some important considerations for successful remote signing:

  • Make sure your internet connection is secure – An important aspect of compliance is protecting customer and deal data. Especially if you’re working somewhere other than the dealership, be sure your wi-fi signal is password protected.
  • Begin with some show-and-tell – Start by having a conversation with the buyer to make sure they have access to the proper technology required for the contract review and signing: a desktop computer, laptop or tablet with an up-to-date browser that’s connected to the internet. Then explain the eSign process, including the need for their consent, and talk through how the signature capture process works.
  • Verify the customer’s identity – When you’re dealing with customers remotely, it’s more important than ever to make sure every customer is who they say they are. Using a compliance solution like Dealertrack Compliance during the deal process for vital Red Flag alerts and OFAC checks can help – and can also provide out-of-wallet questions if needed.
  • The next best thing to face-to-face – We recommend using video conferencing, Facetime or another video chat app to help make sure you’re dealing with the right person before you connect to their device for contract review and signing. Video is also helpful for walking the customer through the review and signing process so you can see their screen and provide direction as needed.
  • Record the signing ceremony – Choose a video conference platform that allows you to record the signing session for the purposes of ID verification and fraud risk mitigation. Tell the customer you’ll be recording and get their permission before you begin.
  • Give the customer time to read the fine print – Before the customer signs, make sure they review the contract. They can do it on the screen, but you should recommend that they use the print or download functionality to create their own copy.
  • Follow delivery protocols and best practices1 – The vehicle should be delivered as soon as possible after contract signing. When you arrive at the customer’s location,2 start by validating the buyer’s identity by matching their driver’s license to the information on the contract.
  • Don’t renegotiate upon delivery – Do not negotiate terms and conditions of the deal at the consumer’s home, as this could invoke a three-day rescission period that allows the customer to cancel their transaction.
  • Disinfect high-touch areas of the vehicle – Relieve any customer concerns by cleaning the vehicle in accordance with CDC guidelines and telling the customer about your sanitizing procedures.
  • Finalize all documentation – If there are any remaining DMV or dealer documents, have the customer complete them now. Use a tablet to photograph and upload any remaining stips and trailing documents. Be sure to have the customer sign the delivery receipt and keep it for your records. And don’t forget to deliver the final signed copy of the contract to your customer.

If a customer will be at the dealership to sign their contract and take delivery of their vehicle, you can still give them the option of bringing in their own device for signing. That can help to ensure social distancing and alleviate any concern the customer may have about handling shared devices.

Dealertrack assisted Remote Signing is available for dealerships with Digital Contracting on Dealertrack F&I. Click to learn more about getting started with assisted Remote Signing at your dealership.

The 2022 Dealertrack Compliance Guide includes a new chapter on automotive eCommerce sales. Download the Compliance Guide here.

.1 In locations where permitted by federal, state and local COVID-19 ordinances, consider offering at-home delivery and observe CDC protocols during vehicle delivery.
2 Customer must take delivery in the state they are in as out-of-state deliveries are not available at this time.

Why Now is the Time for Auto Lenders to Go Digital

Posted on

Over the past several years, the paperwork and manual processes for handling auto loans have been gradually giving way to technology-based processes. But this year has changed everything. In the wake of the COVID-19 pandemic, digital solutions have quickly moved from “nice to have” to “vital” for both dealers and lenders.

Consumers have led the charge: two-thirds of car buyers surveyed said they were more likely to purchase a vehicle 100% online1. Dealers have gotten up to speed quickly: the same study found that 81% of franchise dealers and 47% of independent dealers say they now have a digital retailing solution in place.

These technology solutions help keep consumers and dealership personnel safe while keeping the deals moving – but what role do lenders play? Digital retailing tools work similarly for lenders to initiate a contact-free browsing process that can turn casual shoppers into pre-approved, contract-ready buyers for their dealer partners.

With digital retailing technology helping dealerships work deals virtually and remotely, contracting electronically is the natural next step in the deal process. And today’s customers appreciate the contactless deal experience.

Now more than ever, dealers are relying on their lender partners to support the digital solutions that keep car sales moving. Lenders are embracing technology for driving consumer engagement and expediting the signing, submission, review and funding of dealers’ contract packages. Here are some of the drivers behind many lender modernization strategies.

Digital workflows drive efficiency for everyone — and enable lenders to appear as strong service partners

In the beginning, dealers’ eContracting adoption was driven by a desire to optimize workflow efficiency to counter margin pressure and gain cash flow fluidity. But today, a contactless contract signing process and fast funding are more important to dealers than ever — and Dealertrack data shows eContracting has lenders funding their dealers as fast as the same day. Improving on this level of service helps strengthen dealer partnerships. And strong partnerships can help drive more loan originations.

Digital contract packages are designed for completeness and accuracy, ensuring that no signatures are missed, no calculation errors have been made, and no required documents are overlooked. Dealertrack data shows that eContracting can help reduce returned contracts and lower the rate of re-contracting below 1%.2

And what about office space and paper clutter? With these paperless deals eliminating hefty paper contract packages, the documents are now stored digitally — freeing up office space and lowering storage fees, while still keeping the authoritative contract and digital data readily available in case of audit.

The way forward: matching technology to business strategy

Lenders’ unique financing models and business goals make one-size-fits-all solutions a speculative approach at best. There’s ample opportunity to implement digital strategies that align to a lender’s specific business goals and the resources they have available. The right technology partner will help lenders optimize their processes, drive the online experience consumers have come to expect, and help strengthen dealer partnerships through improved service.

Read more about lender strategies for the new digital car shopper.

.1Cox Automotive COVID-19 Digital Shopping Study, April 4-5, 2020
2Based on 2019 Dealertrack eContracting transaction data

3 Reasons Lenders Shouldn’t Wait to Start eContracting

Posted on

Still wondering if you should be using eContracting for your auto loan originations? Let’s examine some of the reasons lending institutions should already be using eContracting or digital contracting.

1. eContracting is the new standard

It’s no longer a matter of if you should be using eContracting: the industry has already hit the tipping point and it’s now a matter of when you’ll start trying to catch up with the early adopters. Lenders who use eContracting are already funding 2-3 days faster on every transaction and building dealer loyalty in the process. Which leads us to point #2…

2. Your dealers want eContracting

Dealers are adopting eContracting in record numbers and demanding that their lenders participate. In their efforts to counter margin pressure, dealerships are shifting their workflows to gain productivity and efficiency. They also value fast funding — and Cox Automotive dealer/lender research shows that it’s one of the top three reasons dealers choose a lender partner. Finally, there is customer demand for a faster and more efficient purchase process, which can be facilitated by eContracting and electronic signing.

As every lender knows, partnerships with dealers are measured by service, so helping your dealers improve their workflow and funding them as quickly as possible is exactly the kind of service that can help improve your relationships.

3. The paperless deal offers operational efficiencies

The industry is headed toward the paperless deal to improve efficiency and reduce overhead costs for dealers and lenders alike. eContracting can reduce days in transit from the dealer to the lender from an average of five days to just one, and its built-in accuracy features can help reduce returned contracts and re-contracting by 80%.

The paperless deal saves dealers from having to reprint forms that change, eliminates shipping costs, and allows for digital document storage that frees up office space while helping to keep forms available in case of audit.

Taking another evolutionary step further, going paperless leads to enabling lights-out funding. With eContracting doing the validations and eContracting producing electronic documents, the next opportunity is to use technology to auto-fund contracts the way loans are auto-decisioned today.

Want to learn all the reasons why now is the time to start eContracting with dealers? Join us at AFSA on Thursday, February 13th where Andy Mayers takes the stage to discuss Digital Contracting during the Technology Advancements program—or stop by booth #104.

What Dealerships Need to Know About Electronic Signatures

Posted on

In the year 2000, Tiger Woods became the youngest golfer to win a career Grand Slam, the original Mini ceased production, and the U.S. passed the E-Sign Act (Electronic Signatures in Global and National Commerce) ensuring that electronic signatures can be valid and legally binding.

Even though more than 20 years have passed since then, confusion about the legality of eSignatures remains. In this post, we’re going to work on clearing up some of the common misconceptions around electronic signatures.

Federal Laws Regarding eSignatures

The E-Sign Act states that a contract or signature, “may not be denied legal effect, validity, or enforceability solely because it is in electronic form”. Basically, the E-Sign Act gives eContracts and eSignatures the same legal standing as paper records. It also says that electronic records count as information “provided in writing,” as long as a consumer agrees to conduct their transaction using electronic means.

The E-Sign Act also requires lenders to keep accurate and complete electronic records that can be accessed and reproduced as needed by people who are authorized to access them.

You can click here to read the E-Sign Act if you want to know exactly how it’s stated.

In 2010, provisions of the Uniform Electronic Transactions Act (UETA) helped ensure that each state aligned on recognizing the legality of electronic contracts for business and commercial transactions. As of August 2021, New York State has not adopted UETA, but they have other laws recognizing electronic signatures for lenders.

But What About California?

When California adopted UETA, it made an exception for auto signing. However, California later adopted E-Sign, which supersedes UETA. Currently, every major provider and lender includes California in their eContracting platform.

Please consult your lawyer if you have doubts or questions about the legality of eSigning in your state.

What Are the Advantages of eSigning?

Giving electronic contracts and signatures the same legal status as their paper counterparts offers significant benefits for dealers, customers and lenders:

  • Accuracy – eContracting helps ensure that contracts are complete and more accurate before the customer signs and the dealer submits them to the lender. It also helps eliminate missing signatures, which is one of the top reasons that funding packages are returned as incomplete and subject to re-contracting.
  • Compliance – With the system flagging any potential issues, a dealership can be more confident that each contract is compliant with state and federal consumer protection regulations. Customers are protected by a documented process that ensures they know what they’re signing before they sign and that they’ve provided affirmative consent to complete their transaction electronically.
  • Customer Satisfaction – The ability to review and sign documents electronically greatly enhances the customer experience. Rather than flipping through dozens of pages one-at-a-time, eSigning offers customers the ability to seamlessly and efficiently move through the car buying process. 2021 Cox Automotive Car Buyer Journey research shows that heavy digital buyers who completed more than half of their purchase activities online, saved nearly 30 minutes by handling negotiations, contract review and signing digitally. These buyers had more overall satisifaction with the shopping experience, which can help to preserve the dealership’s CSI score and improve customer loyalty.
  • Faster Funding – The lender receives data that has already been checked for accuracy directly into their loan origination system (LOS), which not only maximizes data security but allows for loans to be processed and funded more quickly.

How Widespread is eSigning?

Industry-wide, lenders have purchased, securitized and funded billions of dollars in eSigned retail and lease contracts to date in all 50 states.

Are All eSignatures the Same?

Dealertrack eSignatures are accepted by all major lenders participating in eContracting on our platform in every state. In addition, there are aspects of our technology and signing process that help ensure eSignature authenticity and provide the authoritative copy of each contract in ways that some other providers do not. We can also offer a better customer experience with “tap and sign” functionality that allows buyers to sign one time per signing session and have all subsequent signatures pre-fill with just a tap.

If you’d like to learn more about the advantages of Dealertrack Digital Contracting, please click to request a demo.

Stay Nimble and Accurate When Funding Loans

Posted on

Auto lending is a valuable service for dealerships, with 85% of new cars purchased in 2018 financed rather than purchased outright. Dealers require fast funding to stay cash flow positive, so it’s important for lenders to strive for the quickest possible turnaround.

Every day, lenders must perfect the juggling act of staying competitive through speedy funding while still focusing on accuracy and compliance. But if you think of day-in-and-day-out contract processing as juggling sandbags, peak loan volume months are more like juggling torches.

That’s when the combination of digital and paper contract processing can strain the resources of even the most efficient lending operation and its staff. When you’re facing a significant increase in volume, it become harder than ever to maintain compliance with state and federal regulations while trying to speed up data entry without introducing errors.

Finding the balance between accuracy and speed

Before you can maximize funding speed, it’s important to figure out how and where your processes might be slowing things down. When it comes to processing paper contracts, most lenders find that manual data entry, validation and storage of documents are where things get off-kilter.

Working with a reliable technology partner to handle these tasks is a cost-effective way to increase your speed to fund without sacrificing accuracy or compliance.

Want to learn how? Download our eGuide.

Expedite Contract Processing Regardless of Workload

Posted on

eContracting has made it so indirect auto lenders can process contracts and fund their dealers faster. Unfortunately, many dealers haven’t given up the paper contracting habit yet, so lenders must find ways to beef up their contract processing on two fronts.

It can be a challenge for lenders to deliver faster funding for paper contract packages, especially if their in-house operations are set up for a certain level of processing volume.

Lending institutions can find themselves understaffed for peak car buying season, but reluctant to scale up permanently knowing that their loan volume will ebb and flow. Still, lenders must find a way to receive contracts, accurately enter all the data into their system, finalize the funding package, get the package through review and approval, and store all of the paperwork for the appropriate period.

The resources required for this process vary depending on the size of the lender, but the workload fluctuates regularly either way.
So how can a lending institution maximize their resources to keep loans processed efficiently?

One solution that many lenders turn to is a partnership with outside experts who can handle the contract submission workflow and help lenders stay flexible and improve their efficiency and profitability. This support team can facilitate both paper and eContract processing to give lenders optimum workflow year ‘round.

Want to learn more about optimizing your operations to deliver better dealer service? Download our eguide or schedule a no-obligation 1:1 consultation with your Lender Solutions Specialist today.