Breakthrough claimed in remote, electronic signature on auto finance contract

Dealership technology provider RouteOne, in a venture with Toyota Financial Services, says it has successfully processed the industry's first remotely captured, electronic customer signature on a finance contract arranged through a dealership.

The contract was booked last month by a Toyota dealership employee through Toyota Financial Services, which is piloting RouteOne's technology called Remote eSign, RouteOne said Dec. 14.

The initiative, if it spreads, would mark a significant step in the auto finance industry's pursuit of a vehicle purchase that can be conducted completely online, making the vehicle financing process simpler and faster.

Customers have long been able to get pre-approved for credit online, but RouteOne says remote, electronic signatures are an industry first.

RouteOne is in talks with another captive finance company and expects to complete a deal before year-end, CEO Justin Oesterle told Automotive News.

RouteOne -- formed by Ally Financial (formerly GMAC), Ford Motor Credit, TD Auto Finance and Toyota Financial Services in 2002 -- provides technology that connects dealerships with lenders. RouteOne's technology supports indirect financing, in which consumers arrange their vehicles' financing through a dealership, rather than directly with a bank or other finance company.

The Farmington Hills, Mich., company is one of the industry's electronic contracting leaders, with more than 6,600 e-contracting dealerships and more than 40 e-contracting lenders on its platform.

Remote eSign allows dealers to give customers access to an e-signable finance package that includes the retail installment contract or lease agreement and finance and insurance product forms, the company said in a statement.

It's an extension of RouteOne's Remote Document Delivery, which launched in January. That product allows customers to access F&I documents before going through them at the dealership. Remote eSign allows them to sign the finance forms electronically before finalizing the transaction at delivery.

Once the customer completes the finance package remotely, the dealership receives a notification and sends the package to the customer's lender.

Some state and other regulatory forms still require a signature in ink, so those documents would need to be finalized at delivery.

Dealerships will be able to take the reins in terms of how and when customers gain access to the remote financing package, which gives them an opportunity to present F&I products before customers review the finance package remotely, Oesterle said.

"This is dealer-configurable and dealer-controlled in terms of process. The only time a consumer is going to have a package available for review is when a dealership staff person believes that the deal is sufficiently mature enough for that to happen," Oesterle said. "So all of this is in the hands of the dealer in terms of time and place of the presentation and even process choice."

Pete Carey, group vice president of sales, marketing and product development at Toyota Financial Services, said the Remote eSign option will help Toyota Financial better meet consumers' standards.

It's difficult to know how many consumers will choose an online vehicle transaction, "but we believe there are going to be people who are going to want to transact in that fashion," Carey told Automotive News this year.

RouteOne said it designed eSign with a focus on security. When a dealership enables Remote eSign, staff must pass a two-step authentication process that generates a secure URL to a virtual signing room, the statement said. Each time customers enter the signing room, they must enter a PIN. Then they have to sign each document to verify that they saw it.

RouteOne has been working on the eSign capability for more than a year, Oesterle said. "The technology effort was much smaller than defining the compliance and legal aspects of the solution," he said. "The solution had to be carefully crafted and reviewed to ensure RouteOne is delivering a compliant solution and addressing our customers' needs."

Remote eSign will give dealerships a "more efficient" way to execute finance contract packages, he added.

The product "allows a response to consumer expectations. In every industry, including ours, consumer behavior and expectations has been creating some innovation and improvement in experience," Oesterle said. For the industry as a whole, he said, "we believe that this is a very helpful and really necessary building block."