Rasheed Creary has his customers in and out of the F&I office in 15 minutes.
The key to keeping it so brief? Electronic contracting.
"It's shortened the process by far," said Creary, business manager at Sutliff Volks-wagen in Harrisburg, Pa.
Before the dealership began managing finance contracts electronically, Creary's customers would be in the office for around an hour. "I'd sort of have to entertain the customer" between processes, he said. Now he can download forms instantly from an e-contract library, he said.
E-contracting speeds funding to dealerships, provides a more efficient customer experience and improves stores' F&I operations. And its use has grown since the technology began creating buzz in the mid-1990s. Some banks and automakers' captive finance companies have started accepting e-contracts. But for e-contracting to become mainstream, lenders must do more. And dealers need to give them the push, insiders say.
Many automakers' captive finance arms, such as those of Ford, General Motors, Toyota, Honda and Nissan, have already embraced e-contracting. And Chrysler Capital is on its way. It began implementing e-contracting this year, with a dealer rollout likely by year end. Volkswagen, BMW and Mercedes-Benz also have made significant strides.
Hyundai Capital America, which operates Hyundai Motor Finance and Kia Motor Finance, does not accept e-contracts, but it is exploring accepting e-contracts in the future, a company spokesman said.
Nissan, Volkswagen and Toyota accept nearly all transaction documents electronically, the companies say.
Nissan Motor Acceptance Corp. and Infiniti Financial Services have been accepting e-contracts for more than 10 years. Both started financing with e-contracts in 2004. About half of their contract volume now is e-contracted, a spokesman said.
Volkswagen Credit began more recently, with a pilot about a year and a half ago, said Hans Bremer, general manager of the credit fund for Volkswagen Credit and Audi Financial Services. Last year e-contracting made up only 5 percent of VW Credit's volume. As of last month, Volkswagen e-contracts made up 15 percent, or 20,000 electronic deal jackets.
Slightly fewer than 200 Volkswagen dealerships use e-contracts, and the finance arm is planning to add 100 more by year end, Bremer said.
Ford Credit would not say how many of its dealers use e-contracts, but a spokeswoman said that e-contracting is available in all 50 states and volume has been growing. GM Financial said 275 to 300 dealers a month file retail installment sales contracts electronically.
GM Financial is developing electronic lease agreements with a rollout expected later this year or early next year.
"Our long term goal is to support funding all business and the entire deal jacket in an e-contract," Mike Urrutia, GM senior vice president of dealer services operations support, said in an email to Automotive News.
Toyota started e-contracting in 2013. Just over 90 percent of its 1,500 dealerships are using e-contracts.
In May, e-contracts made up 78 percent of Toyota Financial's volume compared with 60 percent in May 2014.
"In the beginning, it was a challenge of changed management," said Jason Zahorik, sales planning manager for Toyota Financial. "At some point, dealers start to understand the efficiency they gain."