F&I and Showroom, March 2014

Industry Week latory environment is helping to push the econtracting discussion beyond the chicken or the egg debate that has plagued the technology since it was introduced in the late 90s noting successful adoption efforts by Ford Motor Credit and Toyota Financial Services I think its the tip of the iceberg Mason said I think the success Ford Motor Credit and Toyota Financial Services had will start putting greater pressure on fi nance sources across the board to adopt econtracting Toyota Financials Groff talked about the captives econtracting partnership with RouteOne during the CEO Panel He told the audience the company beat its initial goal of 30 utilization ending the year with the companys look to book being 56 electronic From a compliance standpoint for the dealer to have a system to catch everything is a step forward from not just an effi ciency standpoint but customer satisfaction he said noting that the captive waited until last year to roll out econtracting because it wanted a game plan in place for converting forms to electronic and training dealers When asked why the industry has yet to take to econtracting Berce spread the blame around He said dealers are simply slow to embrace technology saying Thats been their M O for years But he added that the onus really falls on fi nance sources noting that it was lenders that drove adoption of point of sale credit portals I think the reason those systems were embraced was because the lender paid for it he said Its the same with econtracting lenders need to pay for it Dealers on the NADA Leadership Panel also discussed econtracting with Anchor Buick GMCs Williams saying simply We dont do it I dont know why Larry H Millers Leary shared that the group recently worked with a few lenders on econtracting He said the experience was diffi cult especially when it came to meshing the system into the groups existing processes He stressed the importance of training 16 F I and Showroom March 2014 and communication with F I managers a point echoed by William Fox a member of the NADAs board of directors and partner at Fox Dealerships Inc in upstate New York Econtracting is good as long as we are up to snuff he said The room fell silent however when panelists asked fi nance execs in the audience when customers will be able to electronically sign all forms associated with a vehicle transaction noting that econtracting has yet to live up to its promise of a paperless process The question caught the attention of executives from Open Dealer Exchange ODE the fi rm created in 2009 through a joint venture between ADP and Reynolds and Reynolds The reason econtracting has struggled in the industry is because it was defi ned as econtracting but thats just one document Open up a deal jacket There are dozens of documents said Steve Luyckx the companys general manager He noted that ODE has a built in advantage ADP and Reynolds have spent decades building electronic libraries of state provider dealer and lender forms And after spending much of its short existence perfecting its contract validation solution the company he said is shifting its focus to helping lenders receive those contracts electronically Now the industry is ready the point of sale is ready the lenders are now interested in building that electronic catchers mitt Luyckx said In his fi rst address as NADA chairman Forrest McConnell says the NADA will continue the fi ght to preserve dealer participation As for econtractings link to compliance Luyckx said Theres so much guidance around whats going to be monitored And a lot of those guidelines are mathematically driven So were able to provide a lot of data to the lender and work with them to make sure they have the right data to run the right analytics to ensure theyre inside what I call the green zone with CFPB guidelines When the AFSAs Stinebert questioned Ficklin about what an adequate monitoring program looked like she referred back to the bureaus fair lending guidance And after telling fi nance execs that dealer discretion is what the bureau is concerned about she said Were not saying dealers should do the work and add value for free Theyre entitled to be compensated There are times when individual determinations might be valuable to a borrower she added But we dont have a specifi c system to tell you what you should do In his fi rst address as chairman of the association McConnell didnt mince words when discussing the CFPB Many of you know that the government has been trying to impose more regulations over our 783 billion fi nance market Why Because they dont understand our business he said The NADA will keep hammering Washington that dealers dont add to customers credit costs We save our customers money period The CFPBs Patrice Ficklin tells fi nance execs that its dealer discretion not their underwriting practices that concerns the bureau