LAS VEGAS -- Do you believe the auto industry can get the vehicle sales process completed within two hours?
That was the provocative question posed to a room full of lenders and dealers at the American Financial Services Association conference held in conjunction with the NADA convention in Las Vegas.
The room voted via electronic devices. The result: 73 percent said yes and 27 percent said no.
Clearly, the room was full of optimists.
A strong reason for the optimism centers on technology. As Scott Krenz put it: “Technology is usually well ahead of the human being.”
Krenz is CFO of Asbury Automotive Group in Duluth, Ga., Asbury ranks sixth on Automotive News’ top 125 U.S. dealership groups list with sales of 67,232 new vehicles in 2010.
Krenz believes there’s no reason why the sales process can’t be digitalized in the near future.
Digitalization means much of transaction could be done electronically, perhaps using e-contracts and e-signatures, similar to how you sign on the electronic device after you swipe your credit card it at the grocery store.
Krenz says digitalization eventually will have to happen on some level because digitalization would save customers time and save dealers a lot of money.
But there are some issues to address before digitalization can take full effect. One is compliance with various federal regulations. Some regulations require a customer to read a physical document and to sign documents in a particular order, making an electronic transaction challenging.
Then there’s the problem of making salespeople and customers comfortable with an electronic process.
But going digital would benefit lenders as well as dealers. As Michael McConnell, vice president of sales, marketing and corporate planning for Nissan Motor Acceptance Corp. noted, his company often quickly approves a loan application, but snags elsewhere in the process can sometimes bring the transaction to a grinding halt. He cited an example of this when he said a customer’s sales transaction once took seven hours to complete.
Given the competitive nature of today’s vehicle sales environment and the fierce competition among lenders for retail loans, a digital sales process makes sense.
While it would have to be adopted with caution, I bet whoever is first to do digital right, will reap the rewards.