Dealers are still seeing big differences in how quickly lenders pay them on contracts in transit, despite awareness and technology campaigns aimed at speeding payments to dealers when retail customers finance vehicle purchases and leases.
Wesley Chapel Honda north of Tampa, Fla., usually receives payment within 48 hours from the local banks and credit unions that finance its customers' vehicles, said Joe Barba, the store's used-car director.
Conversely, he said, it typically takes five to seven days to get paid for a clean contract without errors on deals financed by Honda's captive finance unit, Honda Financial Services.
Tim Wynacht, general manager of Kathy Fowler Chevrolet and Kathy Fowler Chrysler-Jeep-Dodge-Ram in Lakeport, Calif., reports similar disparities in payment speed among lenders.
On the other end of the spectrum, Mercedes-Benz dealers can get paid ahead of submitting contracts to Mercedes-Benz Financial Services if they use software provided by the captive that electronically validates information in the deal jacket.
The e-validation system allows for fast pay by minimizing document errors, improving throughput in the finance and insurance department and aiding customer satisfaction, says Geoff Robinson, M-B Financial's vice president of marketing. "From our point of view, it is well worth it," he said.