eContracting on the rise: Dealers and lenders shift to a faster, more convenient approach
Good technology simplifies. It creates efficiencies in process and expands the possibilities of increased profitability, in the short term and long term. And as critical aspects of the automotive retail workflow evolve with technology, dealerships — and the lenders they do business with — are beginning to see these efficiencies come to life.
A perfect example is contract funding. Long the domain of the traditional sales and lending approach, today there’s strong evidence that the shift to eContracting is accelerating, as dealers and lenders discover its effectiveness. In fact, we have seen an 18 percent increase in eContracting activity this year, compared to activity in 2014. Dealers simply aren’t looking back: According to Dealertrack surveys, 98 percent of dealer personnel using electronic contracting plan to continue to use the software, and 93 percent would recommend eContracting to their peers. On the lender side, there’s been a healthy increase in electronic contracting adoption, with 20 lenders already on the program, and more planning to support the workflow in the near-term.
Indeed, we’re not alone: A recent article published by Automotive News estimates that 80 percent of all U.S. dealerships will have adopted eContracting within five years. It’s simple: The benefits of eContracting are game-changing:
- It speeds up the process of contracting from days to hours. According to the Automotive News article, eContracting makes funding possible within two to three hours. Dealertrack surveys also show that contract processing turnaround times ranked 4th in importance by dealers when choosing a lender partner.
- It improves accuracy. The process of eContracting enables dealerships to catch errors that would normally slow the contract process and sometimes even lead to recontracting.
Dealertrack’s new mobile review and signing functionality makes the eContracting process even more convenient. Now, contracting can take place when and where the dealer and buyer are most comfortable: in the showroom or on the lot. That’s crucial to the retail process, as it moves away from the time-consuming and “confining” days of old, and toward a technology-enabled, mobile and flexible process that brings added convenience to the dealership workflow and improves the buyer experience. That is, after all, the point of good technology: to simplify and evolve the act of buying and selling cars into an efficient, profitable and consumer-friendly experience. The emergence of eContracting as a vital tool in this process is another important step and another way Dealertrack is helping transform the automotive retail experience.
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