When I say that Provider Exchange Network has connections to F&I product providers, this really means connections to the providers’ admin systems. So, I am pleased to announce our relationship with a leading purveyor of these systems, Stone Eagle. The official announcement is here.
Electronic contracting is now available to users of the Stone Eagle SCS and ARCH systems. I particularly like ARCH. It is the AJAX based system I mentioned in my latest post on software development. Providers often ask me to recommend an admin system and, of course, I am recommending Stone Eagle.
Brian Reed has a post over at P&A Magazine on provider sites for e-contracting. I would say that he cribbed my analogy with online credit apps, but I know Mr. Reed is an old hand and he has lived through the same history.
In the mid to late ’90s, a number of auto finance companies developed their own system for dealers to electronically submit credit applications.
I agree with Reed’s central complaint about the provider sites. As I have written previously, they break the dealer’s process. I might add that DMS integration isn’t getting any easier. So, what is the best way for a product provider to support e-contracting? Continuing the analogy with online credit, Reed suggests a single web site for multiple providers. Think of Dealer Track, only with products instead of finance contracts.
I see a few problems with this idea. First, providers will not support a shared platform if it allows rate shopping. Then, of course, there is the problem of DMS integration. But the biggest problem flows from the online credit analogy.
Lenders can now bypass the aggregation sites, in favor of direct links to the DMS. Marty Zwolan calls this “disintermediation.” It’s the mission of Open Dealer Exchange. The best way to support e-contracting is to exploit a system the dealer is already using.
What Dale Pollak says about trade valuation is spot on, and it also applies to upfront pricing. Dale says that having an efficient process is worth more than wringing every last dollar out of every car. Brian Benstock says the same thing about his new-car business, “making less per transaction, but doing more transactions.”
Readers of this blog already know my thoughts on upfront pricing. Trade valuation is another objection to online F&I. How can the customer desk his own deal if he doesn’t know what his trade is worth? Well, the pieces are falling into place. In addition to choosing a car online, the customer will soon be able to do his own F&I. The challenge to us, as innovators, is to present software tools that encourage customer involvement.
Update: Six years later, Brian Benstock is still at it. Read here about his vision for a digital “store without walls.”