F&I and Showroom, July 2017

www fi magazine com 17 F I and Showroom July 2017 per month for an unlimited number of contracts bringing the total cost to remit those 50 contracts to 300 That equates to a 200 savings per month for ABC Motors using econtracting Now multiply the monthly costs of both scenarios by 13 locations Yeah mailing contracts can be a large and unnecessary expense Keep in mind these calculations do not account for any resigns which would result in two overnight shipping charges and an extended wait time for funding As previously noted electronically contracted deals are funded within 24 hours The average funding time for mailed in remitted contracts is three to four business days And while the dealership waits it is still paying interest on that money until those deals are funded To help put things in perspective here is an example of a typical funding timeline Saturday ABC Motors has a great day of business Tuesday Deals from that busy Saturday are finally packaged in the office and mailed out by the end of the day two business days after the contracts were signed Thursday The bank finally receives those Saturday deals four business days after the contracts were signed By the time the bank sends funding it could very well be another five to six business days of CIT for a total of nine to 10 business days after the contracts were originally signed Now that timeline assumes stipulations arent involved or a resign isnt required If they are funding may not be received until 11 to 13 business days after the contract was originally signed Time is money and as you can see econtracting can significantly help a dealership save on both STEP 3 IMPLEMENT PENALTIES FOR VIOLATORS OF POLICIES AND PROCEDURES Contacts in transit have always been a concern for dealers no matter the size of their operation So aside from conducting daily build a deal meetings and adding econtracting adjusting compensation so no one gets paid until the deal is funded may be necessary It may seem a little harsh but it will deliver a more desirable result Hey unless there are consequences there will be no change in behavior Heres a possible compensation plan to implement for dealerships that remit 75 to 100 of their deals using an econtracting platform Deal funded within five business days 100 of commission Deal funded between six to 10 business days 75 of commission Deal funded between 11 to 15 business days 50 of commission Deal funded after 16 business days no commission The degrees of punitive measures should only be put in place after the policies and procedures as well as the build a deal meeting and econtracting are implemented and only if they are needed Your F I development company is a great resource to help resolve high CIT balances It can also assist with the build a deal meetings and negotiating an econtracting platform as well as other customized in dealership support for your dealership Bottom line implementing the above steps will help to dramatically reduce CIT balances resulting in more cash flow for the dealership ABOUT THE AUTHOR Demetrios T Lahiri serves as national vice president of sales for American Financial Automotive Services Inc Contact him at demetrios lahiri@ bobit com The average funding time for a mailed in remitted contract is three to four business days However it is not uncommon for a dealer to wait nine to 10 business days after the contract is signed for the deal to be funded If a resign or stipulations are involved the deal may not be funded until 11 to 13 business days after the contract was originally signed One way to shorten that timeline is making the move to econtracting which promises to have deals funded within 24 hours It also eliminates recontracting due to missed signatures or incorrect deal structure