Dealerships are trying hard to speed sales transactions, and that may give a shot in the arm to electronic signatures and e-contracting for auto loans, experts say.
The benefits of e-signatures and e-contracts include faster, more accurate transactions and a virtual paperwork trail that documents compliance with rules and regulations, said Mark Singleton, senior vice president at dealership software vendor Reynolds and Reynolds Co.
Also important, he said, is that customers seem to be more satisfied and engaged in the process.
“Everybody benefits. E-signatures make sense,” he said.
Reluctant to change
Despite the benefits, electronic transactions have been slow to catch on. Points out Singleton: “People say this is the slowest adoption of a killer application in history.”
Still, even though e-deals haven’t caught on as fast as his company would like, Singleton said, Reynolds and Reynolds’ docuPAD -- an interactive F&I menu screen and processing system that enables customers to make selections during the deal process -- had a role in more than 1 million car sales, and that was as of a couple of years ago.
Singleton spoke last week in New York at a conference of the Electronic Signature & Records Association. Also there was Brian Krasavage, senior director of product management for CDK Global Services, formerly ADP Dealer Services.
In separate presentations, Singleton and Krasavage cited reasons for the slow rollout of electronic car deals. For one thing, Singleton and Krasavage said, many dealers and lenders are reluctant to change their processes, and they may hesitate to spend money on new systems. Also complicating the picture is that state regulations differ. Some states insist on ink-signed versions of their own proprietary paper forms.
“There are still required preprinted paper forms,” in some states, Krasavage said. “Some forms require notarization. Some lenders won’t accept e-documents.”
Even so, experts say, the move to e-contracting is gaining traction.
RouteOne, a Reynolds and Reynolds competitor, this year pointed out that captive finance companies have become more active in e-contracting, and that’s a big motivator for dealerships to get on board. RouteOne said it expects its e-contract volume to more than double in 2014 for the second straight year, to well over 1 million contracts.
At the conference, Krasavage said the movement to faster retail transactions is helping push electronic documents. For instance, he cited Sonic Automotive Inc., which has a goal of speeding the average transaction to one hour or less in its 100 or so dealerships. “Time correlates directly to a positive or negative customer experience,” Krasavage said.
Not just literally, but figuratively, too, according to Singleton. When customers use a screen to make choices, it creates the illusion for them of time passing more quickly, he said.
“Time changes for them,” he said. “It’s called flow. They lose track of time.”