Since moving to Toronto, I have been renovating the house and making a study of Canadian F&I. Some things here are more advanced, like the variety of financing plans, and some are backward. Pictured here is something I haven’t seen in a long time – the dreaded “secret price” button. This is a far cry from dealer sites in the U.S. and contrary to everything I believe about e-commerce. For my new friends in Canada, here is the right approach. As a consultant, this just means more work for me.
Matt Nowicki has a good article over at F&I Magazine, in which he offers reasons why dealers should embrace e-contracting. His audience is general agents, and we imagine them trying to sell the idea to an F&I manager. Another group Matt might have included is the menu-system trainer, trying to coax the manager through those extra steps.
Provider Exchange Network, which ODE purchased last year, will allow for e-rating and e-contracting between providers and dealers through the DMS.
As I have written previously, we innovators have an obligation to show value for the dealers. They don’t care if multipart forms are impractical, for instance, as long as they are supplied free of charge. Matt’s article answers some of the objections to e-contracting. A little discount wouldn’t hurt.
In the software business, we often blame the customer for not embracing our latest innovation. This has certainly been the case with e-contracting. We solved a host of technical problems, from data standards to digital signatures, only to discover – dealers won’t use it.
They have some good reasons. Laser forms require multiple copies and multiple signatures. Signature pads cost money and customers don’t trust them. Laser printers are expensive. Inkjet printers are cheap enough, but you need one in each office. Blank paper is $9.00 a ream, compared with contract stock brought in free by agents and field reps. All things considered, the impact printer works just fine.
This reminds me of when we first put credit applications online. Dealers already had the perfect solution. “I go have a smoke while they fill out the app, and then I blast fax five lenders.” How do you compete with that?
We showed that online credit, combined with automatic approval, closed more deals. We showed that the internet was cheaper than the fax, and that the system would share data with your DMS. We also kicked in a $20.00 spiff, as I recall, which we recovered in data entry costs.
Today’s challenge is no different. Dealers are shrewd enough to know that the benefits of automation accrue mainly to the finance sources and the product providers. As innovators, it is our job to show what’s in it for them.