Tag: F&I

Top 8 Profit Drivers for Today’s Digital Dealer

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At a time when more of the shopping, buying, and relationship building is taking place online, dealers are taking stock of their digital technology portfolio. Cox Automotive forecasts that half of all car buyers will engage with at least one digital tool during the purchase process—which could mean more profitability for your car dealership business. Paired with award-winning support and data continuity, backed by the security of an experienced partner, dealers are setting the stage for success with the following list of profitability drivers:

1. Performance Management

There are few experiences worse than signing a contract and watching a vendor disappear before the ink has had a chance to dry. A true dealership partner should be available when you need them (and often before) to see your business succeed. They should set performance benchmarks and goals — and then hold your team to them.

 

2. Five-Star Support

When you’re working with a trusted partner, having a good support system there when you actually do need it to minimize interruptions should go without saying. However, you should say it, and demand it, before you sign a contract. Take a look at the average response rates and customer satisfaction scores of any potential vendor you’re considering. Emergencies happen; what can you expect when things go south?

 

3. Easy-to-Use Technology

Complicated interfaces, multiple logins, a lack of available training resources, and redundant data entry are like the four horsemen of the apocalypse to your retention strategy. If you want to improve the morale of your staff, invest in technology that is easy to use and helps your people focus on building better customer relationships.

 

 

4. Digital Signing and eSignature Templates

Maximize time savings for both your employees and your customers with the flexibility of technology that allows for digital signatures and digital document signing. Go one step further with technology that allows your team to save their most frequently used documents so they can quickly and easily pull these up for eSigning whenever they need to finalize a deal.

 

5. Digital Payoff and Lien and Title Release

Faster title payoff and lien and title release give your dealership the opportunity to turn inventory faster and save on holding costs. Normally, this process takes 18 or more days to complete,1 leaving your dealership in limbo as you await the title or lien satisfaction documentation. Cutting this down to as fast as four to six days would not only reduce your holding costs, but it would also speed up your cash flow.

 

6. In-State Registration & Title

Today, more than 30 states are electronic registration and title (ERT) enabled – and most of the remainder have plans in the works to catch up. Using a technology solution for reg and title to process motor vehicle transactions from the dealership’s office is a boon for productivity and CSI scores.

 

7. Cross-border Registration & Title

Showcasing inventory online and using technology to facilitate the deal process means that out-of-state customers have been increasing each year. Having technology available to guide the dealership’s back-office staff through the myriad taxes and fees that vary by the customer’s state, county and municipality helps improve deal accuracy and make deal completion faster, easier, and more customer-friendly.

 

8. Save Costs and Speed Up Cashflow with eContracting

Dealertrack data shows that the average time in transit for paper contracts is five days. In the meantime, holding costs accumulate and cash flow is halted. When you switch to digital contracting, your dealership saves on physical labor and hardware costs such as printers, paper, shipping, and related materials. Plus, you could realize funding as quickly as the same day you submit your deal documents.

Your brick-and-mortar business isn’t going anywhere. But the digitization of the industry is bringing the consumer to you in new and exciting ways. Prepare for car dealership profitability with the precision tools, processes, and the right mindset to achieve success.

 

Set your dealership up for success today. Ask our team of experts for advice—learn more.

 

Sources:

1Based on average industry timeframe for vehicle title release and vehicle payoff process of 18+ days, as determined by 2022 Dealertrack data.

 

 

Drive Efficiency with Simple Dealership Best Practices

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In the quest to stay compliant, competitive, and profitable, dealerships are investing heavily in technology to increase efficiency. But technology alone won’t build a more efficient business. Your managers, frontline employees, sales staff, and back office rely on workflows, data, and training to make their day-to-day work faster and easier. Consumer buying habits continue to impact how technology aids every touchpoint along the way. Building an efficient dealership takes the right technology, tools, and people processes to thrive. Not to worry, though. Taking a multi-faceted approach doesn’t mean your tactics need a major readjustment. As you continue to grow, you can leverage the following dealership best practices to drive efficiency.

Harness Rapid Connectivity with Integrations

There’s nothing less efficient than the frustrating pause, stop, start of technology that doesn’t connect. When your data flows seamlessly between your CRM and your DMS—and then into the Reg & Title or F&I process—you not only save time and become a more efficient auto dealership, but you also keep your staff from jumping ship. The efficiency that comes from being able to push critical, secure information from one (previously siloed) step of the buying process also has an additional perk: a happier customer. This is important because the 2022 Cox Automotive Car Buyer Journey Study revealed buyers are more frustrated with the amount of time required to complete this process than in the previous year!

Digitize Your Back Office to Make Cash Flow More Efficient

Improvements to your back-office processes optimize dealership efficiency but also address slow cash flow, staffing shortages, and untapped trade-in opportunities fueled by digital retailing. Consider a trade-in titling solution to build ease and efficiency into the bedrock of your business. A digital titling solution can shorten the time for vehicle payoff and title or lien release. That means faster inventory turn and faster cash for you.

Use Technology to Cut Out Manual Processes and Workflows

You’ve probably heard this before, but it’s worth repeating that manual data entry is a time-suck. It’s not just inefficient, though. Faster deals lead to happy customers, while fewer paper forms reduce errors. So where should you start? Integrations between your DMS and Registration and Titling software help dealers save time by reducing the amount of information their staff needs to key in, ensuring their credit applications and contracts are accurate, and speeding up the contracting stage. (Dealertrack DMS integrated with Dealertrack F&I ensures up to 75% of data fields are pre-filled in credit applications.) These steps save you and your customers time at the point of sale, but there are other ways to reduce pesky manual tasks that chip away at efficiency.

Leverage Partners to Roll Out New Technology

Last, but definitely not least, when introducing technology to your team, you should do everything you can to reduce the overall loss of productivity caused by stress, anxiety, and frustration your staff endures. But you should never take this on alone. Having a trusted partner in your corner who advocates for change, ensures all team members are secure in their knowledge of the technology, and builds dealership operational processes that help you succeed is worth its weight in gold.

The automotive industry is complex—but building dealership best practices like the above into your technology investment strategy doesn’t need to be. You should look for vendor partners who can step up to the challenge with a proven track record for success. After all, your people, processes, and customers depend on it.

Find a technology partner backed by experience and a proven track record to bring efficiency and ease into your everyday business. Learn More.

Improve Your Dealership’s Digital DNA

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This might be a familiar scene in your dealership: your customers have just test-driven their dream car, checked all the cool features, and are living on cloud 9. Then, out come the piles of paperwork with the long-winded contract review and tedious signing process, which ruins the vibe and the positive feeling they had about your dealership. However, you can keep their excitement and your dealership CSI scores going strong by speeding up the process with the right digital solutions.

With digital contracting, electronic signature, and remote signing, you can say goodbye to paper contracts and let your customers sign on the dotted line without the paper shuffle, and from the comfort of their couch. All this saves time upfront since customers can fill out fields, sign once, and then simply tap after that, and later on because it reduces the risk of errors.

GO DIGITAL TO SAVE TIME AND MONEY

Digital retailing and online credit applications let your customers build and customize their dream ride and their deal terms, and apply for financing from your website, while digital menu technology helps buyers select aftermarket and F&I options with ease.

Digital service invoices make life easier for you and your customers since they can be sent via email or text and customers can see exactly what they’re paying for. And everyone loves the convenience of online payments, whether it’s for parts and service, F&I products, down payments, or vehicle purchases.

Instead of drowning in title work, electronic title and registration streamline the process, reducing paperwork and the likelihood of errors.

Implementing these enhancements into your dealership’s digital DNA significantly improves dealership customer experience, streamlines operations, and boosts efficiency, providing your business with a surefire way to thrive in today’s competitive market.

Learn how Dealertrack’s solutions can deliver the exceptional dealership experiences your customers have come to expect.

Do you Have What it Takes to be a Forward-Thinking Dealer?

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Forward-Thinkers Know How to Increase Dealership Efficiency 

Modern dealerships work hard to stay competitive. Driving efficiency in your auto dealership is a long game, however, and many business owners struggle to embrace the right mix of new technology without sacrificing profitability. So, what are the tactics that set forward-thinking dealers apart? What makes them so rare—accounting for only 33% of total dealerships?

Watch this video to discover how forward-thinking dealers earn 64% higher net profit (vs. static dealers), but also increase dealership efficiency and deliver the ultimate customer experience.

Adopt the mindset and tactics that bring major operational gains. Get your copy of The Forward-Thinking Dealership ebook.
Get it Now

 

Source: 2022 Cox Automotive Forward-Thinking Dealership Study

Six Ways it Pays to Go Paperless

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When Earth Day comes around, it’s a good time to think about saving paper. But saving trees and doing good for the planet aren’t the only benefits of using less paper at your dealership.

If you’re using dealer software, you’re already familiar with the digital efficiency of submitting credit apps to multiple lenders with a click, accurately crunching deal numbers, signing deals on devices, or cutting down the wait for trade-in title release. But digital solutions also remove hassles associated with paper workflows and make your daily tasks easier to manage. Here’s how:

1. You can’t get a paper cut from a mobile device

Does anyone really enjoy printing and collating paper documents? It’s a lot of work and even when you do everything right, you’ll be presenting them to customers who immediately envision a case of writer’s cramp on the horizon when they just want to take their new vehicle and go.

If you made an error? Then you must start over and use up more time and paper.

And let’s not forget what those reams of paper cost! Record Nations estimates that the average business spends as much as $8,000 a year on paper.

Digital submission of credit apps and contracts can be handled on a tablet, so you don’t need to juggle stacks of paper to collect the information and signatures you need. No paper cuts, no writer’s cramp – just fast, efficient processes that help keep car buyers engaged in the excitement of their purchase.

2. We all remember the great toner explosion of 2019…

Printers and copiers can go from being useful tools to messy, annoying hindrances in an instant. Paper jams, the inability to connect to a data source, and mishaps replacing ink or toner cartridges can lead to frustrating downtime and delays for customers. Copiers and printers require expensive, often proprietary supplies, and service maintenance calls are even more costly. And printing checks often requires special equipment and more paper handling with mailing and stamps.

With digital processes, the war with printers is over. Online solutions allow you to submit credit apps, build funding packages, get electronic signatures, transfer trade-in payoffs via ACH, and connect securely to lenders – with no need to involve paper documents.

3. Valuable time and real estate

Did you know that a four-drawer file cabinet takes up an average of 9 square feet of floor space? That sounds like the beginning of an algebra problem, but think about what else your dealership could put in place of all the paper files you currently store.

Gartner research shows that every day, between 2% to 5% of an organization’s files are lost or misplaced. It takes an average of 18 minutes for an employee to locate a paper file and for misplaced files, the time spent jumps up to two hours! In contrast, digital files are securely stored in a customer’s digital deal jacket for easy, on demand access.

4. Keeping data out of the wrong hands

Speaking of secure storage, mishandling paper documents and files can compromise data security and expose your customers’ personally identifiable information (PII). For instance, if you forget to pick up a document from the copier or leave it out on your desk, anyone could pick it up and potentially misuse the information printed on it.

Digital solutions help keep your files password protected and available only to authorized staff members. And electronic transactions are encrypted and more secure than mailing or shipping paper documents, so sensitive customer data stays protected throughout the deal.

5. No need to get up

It’s easy for a customer to miss a signature in the haze of colorful sticky flags on stacks of paper forms. With digital signing, customers can review and sign once on a tablet or mobile phone, then simply click to apply the rest of the necessary signatures. They can do it on the lot, in the showroom, sitting in the vehicle they’re about to buy, or even handle deal completion from their home or office.

Dealerships can create full funding packages with an eContracting solution for uploading stips and deal documents, adding signature and date fields to create eSignable forms, and set up secure, single signing sessions for their customers wherever it’s most convenient for them.

6. Too much? Too little? Just right!

The most paper-intensive part of manual trade-in payoffs is cutting and mailing checks. If it’s a short pay, you have to generate another check. If you’ve overpaid, you get a check back from the lender to process and deposit. Meanwhile, your lien sat release or title release gets delayed until the finances are sorted out.

A digital trade-in titling solution removes all that extra time and paper from the equation with reliable payoff amounts calculated from lender data and payoff submission via ACH. Liens and titles get released faster and your staff no longer has to deal with all the back and forth.

The bottom line

Switching to digital processes can save you up to $65 per deal on average1 – and approximately 52 sheets of paper per deal.2 Don’t let the inefficiency of paper deals impact your business – start adopting more digital credit applications, digital contracts, and electronic trade-in payoffs so you can maximize your savings!

In the spirit of conservation, Dealertrack is rewarding dealerships that use digital solutions throughout April of 2024. Learn how you can earn rewards >

1Savings estimates based on $50 savings from printing, shipping, and forms costs plus $15 savings when using Accelerated Title. Figures based on dealer calculations using Dealertrack’s Accelerated Title Savings Calculator and Digital Contracting Calculator as of 2022. Not a guarantee of savings.

2Based on Dealertrack and dealer customer data as of August 2022

5 Things You Can Do To Speed Up Your Deals

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Compared to manual F&I processes that involve paper forms and pens, digital deals are lightning fast. But there are things you can do to help ensure that you get more of your deals done quickly. Ilan Dee, Dealertrack Director of Product Management says, “Every enhancement made to Dealertrack’s Digital Contracting is done with the recognition that dealers need time and speed on their side to handle transactions more efficiently. We know this is especially important with a customer sitting right in front of you – that’s when those incremental time savings add up.”

We asked Ilan to share his top five tips for improving deal speed and here is what he recommended:

1. Use DMS import

DMS integrations help you save time by reducing the amount of information that needs to be keyed in and ensuring that you’re working with the same data set throughout the credit application and contracting stages of the deal. When you have Dealertrack DMS integrated with Dealertrack F&I, you get 75% of data fields pre-filled in the credit application. For contracts, Dealertrack DMS integration helps you go from import to submit for verification in less than a minute. Integrations with other DMS providers also give you a head start on quickly and reliably completing key fields for credit applications and contracts.

Ultimately, importing information from your connected DMS helps you avoid errors that can inconvenience your staff and customers and slow down funding.

2. Preset as many default values as you can

Many of your deals have common values for specific fields, for example Paid To and Charge Type for contracting. Work with your system administrator to pre-set contracting preferences that are likely to remain the same on most deals, including taxes, fees, and aftermarket products. This will reduce the time you spend manually entering this information – and you can still edit the field contents as needed.

3. Digitize your deal documents

To be able to submit a digital funding package, it’s important to digitize all documents and stips to avoid trailing documents that can delay the deal. Using a combination of Local File Upload and Point of Sale Capture, you can easily bring digitized documents into the funding package. Local File Upload lets you upload files directly from your computer, including email attachments that you’ve saved. With Point of Sale Capture you can use your tablet or mobile device camera to take high-quality images of stips and upload them directly into your deal jacket.

4. Save eSignature templates

To give customers the flexibility of eSigning, be sure to use the Ready Sign feature to add signature and date fields to make digitized documents eSignable. Maximize time savings by creating templates for your most commonly used documents. This will help you quickly and easily pull up those documents for eSigning whenever they’re needed for a deal.

5. Follow the Live Funding Checklist

One of your most powerful tools for building complete, accurate funding packages is the Live Funding Checklist. It includes many of the lender-specific forms and requirements for any given deal and helps guide you on where various documents should be uploaded. Based on continuous dealer feedback, this feature has been enhanced with highlights, asterisks, and a key so dealers know what the lender needs for submitting a complete funding package.

Myles Bauer, Financial Services Director for Muller’s Woodfield Acura, says, “Thanks to the Live Funding Checklist, we are up to date on our lender requirements and there are fewer mistakes in our contracting process.”

Fewer mistakes mean fewer delays in funding, which is one of the reasons that Dealertrack Digital Contracting can fund deals 83% faster* than with manual processes.

Want to know more? Visit our resource page full of information about faster contracting and funding.

An Easier Lease Process with eContracting

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Leasing can be an attractive option for car buyers who enjoy the bells-and-whistles of a late model car but seek to keep their payments in check. Cox Automotive forecasts an overall lease penetration rate of 29% for 2021 – and the rate is often much higher for many top brands. So, handling lease deals is a task every dealership’s back office faces regularly.

The problem is that lease contracts are not as standardized as their retail counterparts and preparing them manually can be a complex and difficult process. Fortunately, lease contracts from many major lease providers can be handled electronically.

Here’s what to look for in an eContracting provider for lease deals:

  • Forms and Calculations – Choose an eContracting solution that provides the specific lease forms and custom calculations for each lender, to help ensure that each lease deal is includes all of the correct forms and is calculated accurately.
  • Lender Certification and Verification – Each lease deal needs to be certified by the lender on the eContracting platform before signing to ensure that the contract is handled properly and that every calculation is correct. Doing so helps avoid errors that could lead to re-contracting.
  • Accuracy and Completeness – Real-time error display working in sync with lenders can help improve accuracy in funding, while close collaboration with each lender makes it possible to have a live funding checklist to further take the legwork and guesswork out of the process.
  • DMS Integration – DMS integration helps minimize data re-entry required for lease deals.

The right eContracting solution should align the dealership’s workflow for retail and lease contracts and create a more efficient process across the board. Going digital with the lease contracting process can help make those transactions faster and more efficient for dealership staff and lease customers.

Digital Contracting with Dealertrack uniFI has DMS integration for lease available across many top DMS providers. Click to learn more and see the list of available DMS integrations!

14 Reasons to Start eContracting Now

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As more and more dealerships adopt eContracting, you might be wondering if now is the time for your dealership to look into getting or using an eContracting solution. The fact is, there’s no good reason not to use eContracting today for the growing list of lenders that currently accept it.

When you adopt and use eContracting with your current lenders, you benefit from more efficient workflows, fewer returned contracts and faster funding from those lenders. Each time an additional lender joins the platform, you’ll be ready to expand those efficiencies in your daily transactions.

Here are some of the many ways your dealership can benefit from using eContracting today:

  1. Move away from the hassles and costs of paper contracts – Using less paper in your contract process means less printing, copying, faxing, toner cartridge replacement, shipping and paper files.
  2. Make your contract process more efficient and customer-friendly – Streamline your workflow with a single electronic deal jacket, integrations that reduce data re-entry, and a smoother contract review and signing process for your customers.
  3. Improvements to your bottom line – Investing in eContracting can cut contract in transit time so you get funded as fast as the same day, and also save on printing and shipping costs.
  4. The convenience of electronic signatures – “Sign and tap” functionality allows buyers to sign one time per signing session and pre-fill all subsequent signatures with just a tap
  5. Faster funding from lenders – eContracting includes features that increase accuracy, which helps reduce the need for re-contracting and allows lenders to review and fund more quickly.
  6. Optimize your contracting workflow – The right eContracting solution should allow your dealership the flexibility to develop eContracting processes that support the way you do business.
  7. Submit and store contracts securely – The security features built into eContracting can help keep data safe within the dealership, in transit to lenders, and after the deal is completed.
  8. Cut down on data re-entry – Integrated technology systems allow customer and deal information to flow more smoothly from lead to contract with less duplicate data entry.
  9. Submit a complete deal that includes aftermarket products – A complete eContracting solution should give your dealership the ability to create and digitally submit service contracts to aftermarket providers and aftermarket sales contracts to lenders.
  10. Extend the convenience of digital retailing to the in-store experience – Support your dealership’s digital retailing initiatives with eContracting technology that meets customer expectations for a seamless online to in-store process and a speedy shopping transaction.
  11. Increase customer satisfaction – The number one frustration for car buyers is negotiation and paperwork according to Cox Automotive 2019 Car Buyer Journey research. Digital review and signing of contracts can save a customer 45 minutes at the dealership.
  12. Make lease deals easier – eContracting helps standardize lease contracts and align them with your dealership’s workflow for retail contracts to create a more efficient process across the board.
  13. Reduce contracts in transit – Overcome cash flow roadblocks with an eContracting process that can get your dealership funded faster.
  14. Offer customers flexible signing options – Have your customers review contracts and eSign from anywhere.

Dealertrack has the fastest growing digital contracting lender network. Find out how we can help you experience the benefits of eContracting today.

Why eContracting and Digital Retailing Go Hand-in-Hand

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More and more dealerships are seeing the value of digital retailing for bringing in customers from a variety of online sources to help counter declining retail profit margins.

Consumers are definitely shopping for vehicles online. Recent research by Google/Kantar TNS found that 92% of car buyers now research online before they buy. Today, 76% of shoppers are open to the idea of buying completely online, according to the Cox Automotive 2020 Digitization of End-to-End Retail Study.

Dealerships are utilizing a wide range of digital retailing initiatives. On one end of the spectrum, there is the all-digital deal. This is where customers complete the entire deal online – including the eContract – and receive remote delivery of their vehicle to their location.

However, most dealerships currently use digital retailing to give customers the opportunity to start their deal online and then transition smoothly to complete their deal in-store. Research shows that 83% of consumers want to do one or more steps of the purchase process online, so even when the plan is to engage customers in person at some point in the deal, it’s important to have the technology in place to continue the shopping experience they prefer.

Allowing car buyers to do their research online can also add to a dealership’s profitability, as 63% of shoppers are more likely to purchase aftermarket products if they can learn about them on their own time before finalizing their vehicle purchase.

How does eContracting fit in with digital retailing? It’s a logical step in the purchase process, extending the convenience of technology-enabled car shopping to the contract review and signing stage of the deal.

With digital retailing in place on your dealership’s website and third-party websites, here’s some of what your customer may have done online before they walk in the door:

  • Select and reserve a vehicle from your inventory
  • Figure their car payment
  • Calculate the value of their trade-in
  • Research aftermarket options and add-ons
  • Complete a credit application
  • Submit an offer on the vehicle

After the car buyer has filled out their information online and taken steps to complete their purchase, would it make sense to print out paper contracts for them to sign at the very end? Of course not!

At a time when consumers are accustomed to a high level of convenience and efficiency from online shopping, eContracting features such as mobile contract review and sign-and-tap help meet those expectations as they complete their vehicle purchase at the dealership. And for customers who wish to to do more of their purchase process online, remote contract review and eSigning provide the flexibility for them to sign from anywhere.

Click to discover how Digital Contracting with Dealertrack uniFI complements your dealership’s Digital Retailing initiatives.

How eContracting Works with Aftermarket Products

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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:

  1. The system receives an accurate price quote and rating for a protection product from the aftermarket provider and generates the aftermarket provider contract.
  2. Depending on the aftermarket provider, this contract may be able to be electronically signed by the car buyer.
  3. The aftermarket provider receives deal data directly so they can initiate the coverage for the car buyer.
  4. 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.

Click to find out how Digital Contracting with Dealertrack uniFI provides eContracting for your entire deal.