Fla. M-B dealer e-validates contracts, gets paid fast

Scott Cooper: No hitches

Mercedes-Benz of Coral Gables rarely has to wait more than 24 hours to be paid by lenders that commit to finance the Florida store's loan and lease customers, said Scott Cooper, the finance and insurance director.

The vast majority of the dealership's customers finance their vehicles through Mercedes-Benz Financial Services, he said. And when they do, his staff is diligent in using electronic contract validation software from the captive to verify and check the information so payment can be made without a hitch, Cooper said.

That 24-hour turnaround on payment puts the cash back in the dealership, where it can be used to buy inventory and finance growth, he said. Mercedes-Benz of Coral Gables is a high-volume store for the brand, selling on average about 270 new vehicles and 85 used each month.

"Cash flow is important to every dealership," Cooper said.

About 88 percent of the thousands of deals that Mercedes buyers financed with the captive this year used the e-validation tool, said Geoff Robinson, vice president of marketing for Mercedes-Benz Financial Services in suburban Detroit.

The software, developed in-house about six years ago, is integrated with a dealership's operating software and checks more than 100 points in a finance deal for errors, omissions and inconsistent information, Robinson said.

By using the software, a dealership typically can be paid in 24 hours and even in advance of the actual contract being sent to M-B Financial, he said.

The captive can pay early because of the confidence the software provides that deals are being presented accurately, he said.

The average transaction price on a new Mercedes vehicle is about $60,000.

Moreover, M-B Financial will fund upfront up to 110 percent of a tentative deal, upon approving credit, to provide a dealership's F&I department some flexibility to increase the loan amount should a customer want to purchase an extended service contract or other F&I product, Robinson said.

M-B Financial also is willing to wait 10 days after it pays a dealership to receive the actual deal jacket before it goes looking for the contract, he said.

The brand has 364 U.S. dealerships.

M-B Financial is the dominant lender to customers of Mercedes-Benz of Coral Gables.

The captive finances all leases, which is important because two of every three Mercedes-Benz vehicles sold in the United States are lease deals. It also provides financing for new and used vehicle purchases, Robinson said.

Cooper said Mercedes-Benz of Coral Gables sends out contracts to the captive at the same time it requests payment. He estimated that 90 percent of deals financed by M-B Financial are paid within a day.

"We see this as a precursor," he said, "to complete e-contracting."

You can reach David Barkholz at dbarkholz@crain.com -- Follow David on Twitter: @barkholzatan

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