Tag: Sales and F&I

Data Safeguards & Identity Theft Protection: F&I Compliance Tip

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Identity theft and data breaches continue to be a serious and ongoing issue for consumers and businesses.

In fact, according to the U.S. Department of Justice, about 9% of U.S. residents age 16 or older were victims of identity theft in 2021 (the most recent year for which stats are available), leading to total monetary losses of $16.4 billion. That includes the misuse of credit card data, as well as personal identity information. Amid this environment, Small to Midsize Businesses (SMB) such as auto dealerships are perfect targets.

With the increase in remote transactions, identity verification is more important than ever. You can help protect your dealership by implementing a few commonsense steps, and by encouraging your staff to follow best practice safeguards:

Tip #1: Acceptable Use

Help control risk by adopting an “acceptable use” policy that ensures employees are not sharing their device, are adhering to strong passwords, and that any corporate-owned data is encrypted. Text messaging should also be discouraged as it is discoverable from the device in litigation and the use of acronyms or shorthand often leads to misunderstandings.

Tip #2: Have a Plan

Have a pre-established plan in place to deal with data security breaches. The FTC has said that an Information Security Program must include a detailed incident and breach response and notice plan to execute in the event of any security breach or database hack in which customer information is or may have been wrongfully accessed, whether by internal or external persons. Pre-identify a team of people to manage the breach and responses. The team should represent each department that might be affected by a breach or that has to be mobilized to interact with the public, including legal, human resources, privacy, security, IT, communications, and, if you are publicly traded, investor relations. Part of the team’s role is to analyze risks to data, data flow, and worst-case scenarios. Test your plan periodically by doing mock drills. Consult your attorney to know your state law and the laws of your customers’ states of residence about when you give notices to customers about data breaches.

Tip #3: Secure Transmission

Do not transmit customer information over insecure channels such as unencrypted email, P2P systems, or wireless access points. These are not secure media. The FTC has cited the absence of data loss prevention software and an intrusion detection system in these media as inadequate practices for an Information Security Program

To get more tips and recommended compliance practices, access the free 2024 Dealertrack Compliance Guide. 

How econtracting can improve your dealership’s bottom line

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When a dealership is considering a switch to electronic contracting from traditional paper contracts, it’s important for them to figure the value they’ll receive from modernizing their processes.

Some paper contract expenses are easy to identify:

  • Paper, ink, toner
  • Maintenance of copiers and fax machines
  • Shipping costs and related materials

Then there are the expenses related to the time the process takes. 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.

Doing the math

A Savings Calculator can help dealerships estimate their projected savings using digital contracting.

Here’s how the calculator works:

Let’s say a dealership has an average of 200 contracts each month with an average loan value of $18,000. Their floorplan rate is 3% and it costs them $15 for overnight shipping and $2 to prepare basic ancillary documents on paper for each deal. Their contract in transit time using paper contracting averages 5 days. Plugging these figures into the calculator, we find that using eContracting for all their contracts would save them $4,879 per month, which adds up to $53,765 per year.

Interested in seeing how your dealership’s numbers add up? Use our Savings Calculator to find out.

Selecting a cost-effective eContracting solution

To maximize cost savings, it’s important for dealerships to choose a solution that doesn’t trade one type of expense for another. If an eContracting solution requires that a dealership purchase expensive equipment or pay a transaction fee for each contract they submit, it will take a lot longer to see a positive return on the technology investment.

An eContracting solution should maximize efficiency and time-savings so that the dealership staff has the capacity to work with more customers. That means a solution that requires less data re-entry and includes functionality to catch input errors and missed signatures to cut down on re-contracting is ideal.

Digital Contracting on Dealertrack uniFI is hardware-agnostic so it can be used on any device including tablets, touchscreens and laptops. And, there’s no transaction fee for dealers. Take into account the savings of submitting all deal documents to lenders instantly and getting funded as fast as the same day, and that’s the ROI dealerships are looking for.

Find out how quickly your dealership can start saving with Digital Contracting on Dealertrack uniFI.

3 Reasons Lenders Appreciate eContracting

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Not sure your lenders are interested in eContracting? Cox Automotive research shows that the need and demand for eContracting efficiency is high for both dealers and lenders. In many cases, lenders are waiting for their dealers to get set up for eContracting so they can all benefit.

Here are three reasons that lenders appreciate eContracting solutions:

1. Improved Accuracy

The last thing lenders want to do is reject the funding package a dealership sent them because of errors or missed signatures. More and more lenders are eContracting with their dealer customers because the technology helps reduce errors that can lead to re-contracting.

When you’re working with multiple systems, re-typing and re-entering data, there’s a possibility that human error can lead to inaccuracies. Integrations with other dealership systems help eContracting platforms boost contract accuracy by reducing or eliminating the need for data re-entry.

eContracting solutions are also designed to verify data entry in real time, flagging potential errors and missing signatures before the contracts are even submitted.

Additional integrated functionality can make it easier for a dealership to submit accurate contracts. For example, lender checklists help ensure that the contract package is complete with digital copies of all required forms upon submission.

When the lender needs more information for funding after the initial submission, eContracting can even support uploads of trailing documents to keep the review process moving smoothly.

2. Faster Processing

With eContracting, contract data can be pushed directly into the lender’s loan origination system (LOS), which speeds up the review process and allows for faster funding. Compare that to many manual processes where documents must be sent to the lender by a combination of overnight delivery and fax, which takes an average of five days in transit.

Ideally, you want a complete digital funding package that keeps all deal documents together, saving the lender the time they would have to spend matching documents that arrived by separate methods.

With eContracting, the lender gets all of the contracting documents immediately, which gives them the capability to fund as fast as the same day.

3. Better Service

Finally, lenders are eager for dealers to submit contracts digitally because it gives them the opportunity to provide faster and better service, which is key for strengthening their partnership. They understand that improving a dealership’s cash flow is vital—and faster loan review and funding helps accomplish that for their dealer customers.

See the growing list of lenders  to learn how Digital Contracting on Dealertrack F&I helps dealerships get faster funding from lenders.

Dealertrack and the Evolution of Digital Retailing

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Earlier this month, Cheryl Miller, Senior Vice President and General Manager of Dealertrack F&I and Titling Solutions, participated in a keynote panel at the Consumer Banking Association’s CBA Live 2019 conference. The topic was Digital Retailing Evolution: What’s NOW & What’s Next, and Cheryl shared her expertise on digital retailing in the automotive industry and how the technology is bringing lenders and dealers together.

Following are some of the subjects Cheryl addressed during the panel.

How has digital retailing evolved over the past year and where do you see it going over the next 2-3 years?

The trend is toward an end-to-end digital experience that gives car buyers the flexibility to do as much or as little of the deal online as they prefer. This opens up new worlds for dealers when it comes to buyer targeting throughout the customer lifecycle, including advertising, purchasing, servicing and financing.

For dealers and lenders alike, it’s driven by customer demand. The way consumers purchase things has changed, and customers want the car buying process to incorporate conveniences such as shopping online. Our research shows 83 percent of customers prefer to do at least one purchase step online outside of the dealership. Using a digital retailing solution can help deliver a better customer experience that’s in line with what buyers want.

This is not the only way dealers benefit from digital retailing. The traditional retail sales process takes 3 or more hours for the average dealership to complete. Completing steps of a deal online saves an average of 30 minutes. A more efficient process gets deals completed more quickly, which gives a dealership more time to serve more customers. Digital retailing solutions better connect the online to in-store shopping experience due to streamlined processes, less data re-entry and increased accuracy.

The market is growing, in large part due to demographics. By 2020, Millennials (consumers in their early twenties to late thirties) are forecast to represent 40% of car buyers. There are more than 75 million members of this tech-savvy generation, and they’re at the forefront of demand for digital retailing experiences. Eventually we expect to see the 100% digital deal where every facet is handled online. Most of today’s customers still prefer to finalize their purchase at the dealership, but each successive generation will be more comfortable with ordering a car online the way they order merchandise from Amazon.

How are dealers and lenders working together to succeed with digital retailing solutions?

Dealers see digital retailing as an opportunity to connect the online experience to the in-store experience, and ultimately as a way to increase revenue. Our 2018 Cox Automotive Lender Study revealed that 51% of dealers say it is important for lenders to offer digital contracting to complement their digital retailing workflow. Dealers select their lender pool based on rate competitiveness, turnaround time for credit application decisions, and the strength of their relationship with their finance partners. Being able to work with lenders via the same platform they use for other digital retailing functions strongly meets two of those criteria.

Dealers today suffer from margin compression, so they are constantly looking for ways to profitably structure their deals with their lender partners. Lenders should strive to bridge the gap so that dealers understand you are there as a partner and what you can bring to the table to assist on margin compression and the deal structure – at the right rate for profitability. We see that most dealers are looking for qualified customers who meet their lender requirements. Dealers are a critical part of the retail experience, often finding the best financing available with valuable incentives for their customers. We offer solutions to both dealers and lenders that are well positioned to offer consumers choices that lead to a frictionless car-buying experience.

Dealertrack and all our Cox Automotive solutions are fully committed to our vision to digitize the process to procure a vehicle “from contact to contract.” We understand dealers and lenders both play key roles in every vehicle sale that involves financing. A well-planned digital retailing solution gives both of them tools that work together seamlessly.

With 85% of all new cars sold needing to be financed, dealers and lenders do play well together. The dealer works with the lender and for them – as well as for the consumer. The dealer provides the lender an opportunity in the form of a sourced lead, the lender is retained, and they work together to sell cars, to the benefit of both organizations. Partnership here is instrumental between dealers and lenders.

Do lenders need to upgrade to digital retailing tools now or can they wait for the industry to mature?

The answer is “now.” The time for waiting is over because dealers are already engaged in some form of digital retailing – many dealers already use their website for leads, digital media/social strategies, and more. Digital retailing enables dealers to capture more opportunities. Thus, now is the time for lenders to act if you are trying to increase your partnerships with dealers and gain market share and grow originations.

The technology is in demand by dealers. Customers are demanding better service orientation and a solution more akin to other shopping experiences, like the way they buy coffee and shop for groceries and other household goods. It makes sense for lenders to put digital retailing tools in place now, even if there are certain functionalities and features that won’t be fully utilized until the industry matures further. Be ready for what is here now, and it will simply continue to grow. Be ready so you can win in the marketplace.

1 Surprising Way to Improve Your F&I Sales

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We all know how the traditional F&I sales process works – and how customers react when a new round of hard selling starts, just when they thought their deal was nearly complete.

According to the Cox Automotive Customer Journey research, more than half of car buyers are dissatisfied with the length of time it takes to complete a vehicle purchase. Interactions with the F&I department are a sore point, so for car dealerships, streamlining the process and making it more customer-friendly is essential to increasing profit.

The same research also found that one out of every three customers arrives at the dealership with no awareness of F&I products – and awareness of these options is crucial for sales.

An article from WardsAuto showcases the future for F&I sales: customer self-selling. In the article, Kevin Cook, general manager of Straub Automotive Group, explained how his dealerships use menu selling to introduce customers to aftermarket products in a friendlier and more comfortable way.

Before customers leave the salesperson’s desk, they receive a tablet from the F&I manager to watch a brief video presentation touching on available aftermarket options. The dealership receives data in real-time showing them which product videos the car shopper watched the longest, which helps the F&I manager determine which vehicle protection products most appeal to each customer.

Here are six reasons why this makes the aftermarket sales process more customer-friendly:

  1. It keeps customers occupied and engaged when they might otherwise be waiting idly for the F&I manager to finalize the rest of their deal documents.
  2. Many customers who started their research online will observe a seamless transition between the dealership website and the in-store introduction to the F&I options.
  3. Each product can be showcased with multimedia presentations including video – and the customer can choose to dive deeper to get additional information.
  4. The presentations include accurate, up-to-date cost information for each product.
  5. Customers get the opportunity to consider their own needs and realize the value of each aftermarket product and how it will protect their vehicle.
  6. The F&I manager can take the information gathered and complete the sale of aftermarket products knowing which ones the customer is most interested in purchasing.

Straub Automotive Group has found that menu selling positions their F&I managers as problem-solvers for their customers, which is a far cry from the hard-sell approach. And it’s been effective, with their stores reaching 80% penetration for sales of vehicle service contracts.

In today’s online, self-service world, customers expect new ways to handle their automotive purchases. In this case, technology paves the way for positive interactions with the F&I manager that make finishing the sale faster and more satisfactory for the car buyer.

Dealertrack F&I offers a seamless connection with Darwin Automotive to provide dealerships with an enhanced F&I Menu process that eliminates data re-entry and creates a more efficient contracting workflow. Learn more and request a demo.

 

Improving F&I Processes to Meet Changing Customer Expectations

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66% of car shoppers are more likely to buy from a dealership with their preferred experience, but less than 1% of car buyers like the current car buying process, according to Autotrader’s Car Buyer of the Future Study. To give customers their preferred experience, dealerships must meet the changing expectations of today’s car buyers.

To create a desirable customer experience, dealers need to create real value for customers while also striving to speed up the F&I process. In a recent Automotive News webinar, Jason Barrie, Vice President and General Manager of Dealertrack F&I, Dealer, teamed up with Kevin Cook, General Manager of Straub Automotive, to talk to adjust the F&I process to streamline workflow and create value for customers.

Kevin knows firsthand how improving customer experience can boost bottom line. When Straub Automotive noticed their customers’ expectations shifting, they decided to switch to a new technology solution that would enable an improved customer experience: Dealertrack eMenu for iPad®.

“Our goal was to take the fear out of F&I,” Kevin said.

Though many dealerships like Straub Automotive see customers approaching F&I with fear, customers still value making a deal in person. In fact, 89% of customers want to sign their final documents at the dealership, according to the Cox Automotive Future of Digital Retailing study. The problem is that F&I has traditionally been a very paper-based activity, which runs counter to the preferences of most internet-savvy customers.

Before switching to Dealertrack eMenu for iPad®, Straub Automotive used non-interactive video tool to aid in the F&I presentation process. With eMenu for iPad®, the dealership was able to shift to a more digital, interactive and personal F&I experience, and F&I profitability quickly increased.

“We introduced the process to the customer and immediately saw about a $150 lift in F&I profitability per car sale, and we knew we were onto something,” Kevin said.

Over the past two years, Straub Automotive has put the eMenu for iPad® mobile technology at the core of their F&I process, reaching 100% utilization by sales and F&I staff. This has resulted in up to 60% penetration on GAP Insurance and an average of $400 additional profit per deal. With one of their dealerships, Cook and his team had initially thought that a 40-50% penetration for service contracts was a good goal, but today they are seeing 75-80%.

To learn more about how to adjust your F&I processes to improve profitability, visit go.dealertrack.com/4ways, and listen to Jason and Kevin’s Automotive News webinar.

Moving F&I Online

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Car buyer preferences are shifting toward more online research, and 83% of consumers today want to complete at least one automotive purchase activity online, according to the Cox Automotive 2017 Future of Digital Retail study.

As dealers move toward a digitized customer lifecycle that encompasses advertising, purchasing, servicing and financing, customers expect a seamless transition from online to in-store.

The F&I process is ripe for digitization. When customers have the option to begin to structure their deal online, their satisfaction increases, along with the dealership’s revenue and profits.

A recent Cox Automotive and PwC survey found that 63% of dealers saw the biggest ROI from digitizing their sales and F&I process.

Learn more about bringing F&I into the digital world in this F&I and Showroom article by Cheryl Miller, Vice President and General Manager of Dealertrack F&I Solutions.

The Consultative Approach to Selling

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by Mo Zahabi

While digital retailing in automotive is on the rise, dealership staff still play an important role in customers’ car-buying experiences. Six in 10 consumers would still want help from dealership staff even if they could purchase online, according to the Cox Automotive Future of Digital Retail Study.

But the roles of the salesperson and F&I manager have changed. In the past, dealership staff were only there to make money off a customer. Oftentimes, the customer knew more the vehicle than the salesperson. Today’s dealership staff, on the other hand, have responded to customer needs and shifted to a much more product-oriented approach. According to the same Digital Retail Study, today’s car buyers prefer staff who are product specialists – people who are highly knowledgeable about features and technology who will also act as consultants and listen to their needs in a low-pressure environment.

This consultative approach is particularly important in F&I, where consumers are critical of the traditional pitch, according to the 2015 Digital F&I Experience study. To connect with your customers – and make the sale – you have to take a more personal, friendly approach to F&I selling.

Empower Independent Learning

In the old approach to selling, there was a one-way flow of product information: the salesperson would tell the customer information as they sat in front of them. It was a belly-to-belly, in-your-face approach. But today’s consumers are hungry for resources that allow them to do their own research. 71% of car shoppers would prefer to do F&I research at home prior to purchase, and 63% say they would be more likely to purchase F&I products if they had the option to learn about them before finalizing their vehicle purchase, according to the Cox Automotive Maintenance & Repair Study.

Consider offering F&I product information on your dealership website, and also give your customers opportunities to do their own research once they are in your store. Mobile menu selling solutions, like Dealertrack’s eMenu for iPad®, enable independent customer learning. These technologies allow you to load a tablet with key F&I product and payment info, giving customers the opportunity to digitally explore your F&I offerings on their own – and better understand the value of F&I products.

Sit Shoulder to Shoulder

Most people use the phrase “shoulder-to-shoulder selling” figuratively, and that imagery is important when thinking about your approach. Customers need to know you’re not selling at them, but consulting with them. But the literal sense of the phrase is important too.

Literally sitting shoulder to shoulder with your customer as you review F&I product information can change the entire mood of the presentation. Without the physical barrier of the desk, the “me vs. you” mentality that can leave customers feeling intimidated in the F&I office is removed. Consider implementing menu selling technology that is specifically developed for tablets like Dealertrack’s eMenu for iPad®, which enables you to sit shoulder-to-shoulder with your customers – figuratively and literally.

Leverage Your Network

Today’s customers know there are many options for everything they can buy, and they want to know that they’re getting the best option available. Make sure you’re familiar with the network of aftermarket providers powering your dealership’s F&I selling solution, and don’t be afraid to explain to your customers where your product offerings are coming from. They’ll appreciate the transparency, and an increased understanding of how the process works certainly won’t hurt your chances of making a sale.

A version of this post originally appeared in Digital Dealer.

Watch this video to learn more about how Dealertrack’s eMenu for iPad can help you implement a more consultative approach to F&I selling.

Mo Zahabi is the Senior Director of Product Consulting at VinSolutions and Dealertrack F&I, where he educates dealers on best practices and ensures their offerings exceed industry expectations. Mo has applied his strong foundation in technology-based applications to the automotive industry for the last 18 years. Prior to joining VinSolutions in 2008, Mo was a respected Internet Director and eCommerce Director for two different automotive groups.

Success Story: Straub Automotive

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Superior customer experience is at the core of West Virginia dealer group Straub Automotive. In fact, the four-store group boasts high CSI scores, multiple Honda President’s Awards and two Nissan Awards of Excellence. So as customer expectations began to change, Straub Automotive knew their processes had to change with them.

One area of customer experience the dealership knew could use improvements was the F&I menu presentation. Straub had been using an aftermarket product presentation video that wasn’t integrated with the menu presentation, leaving customers with a slow, unengaging experience.

To improve efficiency for the F&I team and improve customer experience, Straub Automotive turned to Dealertrack eMenu for iPad®.

Almost immediately after implementing the new mobile technology in the dealership, F&I profitability rose: an average of $150 in additional F&I profit per deal. Watch the video below to hear more about Straub’s success using this mobile menu selling technology.

Watch Straub Automotive’s success story.

Want to learn more about how to align your F&I processes with customer expectations? Join Straub Automotive’s Kevin Cook and Dealertrack’s Jason Barrie for a FREE webinar on the topic. Register here!

CBA Live: The Time for eContracting is Now

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Andy Mayers, Dealertrack Lender Solutions strategist, recently participated in a panel discussion at retail banking industry event CBA Live. The conversation focused on dealer motivations, eContracting, operational efficiencies and internal dealer issues.

From the discussion, we heard common observations about the future of dealerships and how they need to adapt to the consumer’s desire to enjoy a better experience purchasing a car. However, the common takeaway was to meet today’s customer expectations, the role and purpose of F&I needs to change. One way dealers can adapt is with digital contracting, but there are several factors a dealer should keep in mind when considering making the move.

For insights on these factors, as well as key characteristics of today’s car shoppers, read Andy’s full recap of the panel discussion in Digital Dealer.