As the auto industry prepares for the advent of the fully online transaction, there is a specific set of challenges in the F&I arena.
Widespread acceptance and implementation of electronic contracting, achieving compliant and accurate online credit checks, quoting penny-perfect payments and maintaining dealership profitability are important to the online transaction. The path to accomplishing those objectives, however, may be bumpy.
Electronic contracting has been part of the auto industry for more than a decade. Some lenders, such as Nissan Motor Acceptance Corp., Ford Motor Credit Co. and Toyota Financial Services, handle the majority of their contracts electronically, and about 90 percent of F&I product providers offer e-contracts. Although lenders, dealers and vendors have made substantial strides, they have room to grow their e-contracting capabilities to advance the online transaction.
Accurate and compliant pre-screens, pre-qualifications and payment quotes are also essential to the online transaction, experts say. Customers who expect to pay the price they were quoted online will be turned off if they are presented with a higher payment when they get to the dealership. Providers such as CDK Global have launched programs to get customers' payments to the penny through an online platform and its desking software.
By 2019, Cox Automotive expects 10 percent of the auto industry's transactions to be online. Most consumers are accustomed to completing the bulk of their day-to-day transactions online, but whether they'll feel differently when it comes to car buying is open to debate.