Gone are the days where a handshake meant an honored agreement. The consumer product agreement is always changing, creating more work to make sure your dealers’ forms are current and accurate. The need to speed up F&I while minimizing financial risks and regulatory impacts places great urgency on the dealer to econtract aftermarket products.
The industry has accepted this reality, but dealer adoption still lags. Most agree that econtracting is easy. Getting dealers to change habits is the challenge.
“Agents and dealers who embrace econtracting see higher penetration rates, as well as fewer errors and cancelations,” says Justin Eichmann, ecommerce manager for CNA National Warranty Corp. “We recognize that selling styles differ from dealership to dealership. As such, our web services allow for numerous integration options with a wealth of third-party menu providers. When integrated econtracting is easy and flexible, it becomes much more appealing to dealerships and more readily adopted.”
Agents Can Take the Lead
The first and most important step is for the agent to help the dealer make an informed decision about their process. Every dealership is unique. While the F&I manager is juggling day-to-day sales and compliance, agents need to help the dealer choose, set up and train the best sales and administration process. Almost all providers offer integrated options to achieve the goal: an accurate point-of-sale contract that is automatically registered in the administration system.
Electronic submission is not the same as econtracting. You need to know whether your dealers are printing their own contracts via their DMS forms library or using technology to print contracts published by the product provider. Where the contract comes from is important. A DMS-published form — even if accounting electronically registers them — has disadvantages compared to provider-published forms (chart below). The trick is to get the provider-published form while the customer is at the desk.
There are two primary methods to create a consumer agreement: via the dealer’s DMS or via their provider’s system. Upon a visual inspection, they should look exactly alike. But let’s examine the differences:
*The contracts may look the same, but the creation and distribution of the information is very different.
There is little question that, when dealers are using tools to properly econtract,, errors and delays are essentially eliminated.
“Econtracting helps both the dealer and agent,” says John Hensley, regional manager for ADG/EasyCare. “It helps the dealer with reconciliation, missing contracts and contract errors. It also provides a great benefit for agents with quicker remits and more accurate reporting.”
Take Advantage of Integrated Options
Integrated econtracting allows dealers to get the best of both worlds. They enjoy the efficiency of staying in the menu or DMS while accessing provider product pricing (erating) and econtracts in real time.
Systems like Reynolds and Reynolds includes integrated product rating and booking into all of their current platforms, including ERA Ignite and POWER DMS, F&I menus and docuPAD. This integration is often the missing piece that is needed to get dealers to fully embrace econtracting. Integrated econtracting eliminates the dealer’s need to jump between systems and rekey data.
“Dealers rely on their systems to make sure product pricing and contract preparation is accurate each time,” says Ed Pontis, director of product planning at Reynolds and Reynolds. “Reynolds’ product rating and booking delivers real-time pricing and contracts by connecting to provider portals.”
The important first step is to talk to your dealers. Help them understand their process, what systems they use and all the options available. How they choose to manage their workflow is ultimately their decision. The important thing is that the complete process — from F&I through accounting — is defined and consistent throughout the dealership team.