In 2001, J.P. Morgan Chase, AmeriCredit and Wells Fargo launched DealerTrack, a Web-based auto finance credit application process that was expected to revolutionize the way the automotive industry processes credit applications. Did they accomplish that? Most everyone agrees, “Yes, they did.” Today DealerTrack Holdings, Inc (Nasdaq: TRAK) is a thriving entity offering dealers the largest network of non-captive finance sources in the industry.
Their network of finance sources is impressive with nine captive and more than 200 non-captive resources, but what is more impressive is the aggressiveness in which they have tackled other problems faced in the dealership. They are providing solutions through acquisitions, development or a combination of both.
What started out as simply a method to consolidate credit application management has grown to include an eContracting solution, inventory management tool, F&I desking solution, sales solutions and compliance tool; all of which are fully integrated with each other to eliminate duplicate data entry, which saves time and reduce errors. These products were also designed to integrate with the dealership Dealer Management System (DMS) and now even the dealers Web site.
DealerTrack’s ToolKit credit application can now be integrated with your Web site allowing you to capture more complete leads. Customers enter credit information securely, and it is immediately ready for submission to your finance sources. Alexi Venneri, vice president of marketing for DealerTrack said, “Some dealers are using WebSite Plus as a mechanism for the sales staff or customers to input credit information directly into the computer on the showroom floor, enhancing the accuracy and security of their data.”
New inventory management tools include integration for real-time updates of inventory from the dealership DMS system, used vehicle evaluation tools and with the acquisition of DealerWire® earlier this year, inventory analysis and management. Combining these products with the SalesMaker™ solution – a complete sales structure product capable of handling retail installment contracts and leases – creates a complete front end solution for the dealership.
As the first company to roll out an electronic contracting product, DealerTrack paved the way for others to enter the market. Electronic contracting (eContracting) allows you to transmit contract information electronically to financing sources and receive your funding as fast as the same day while virtually eliminating the hassles of re-contracting which can also improve CSI. Venneri said, “We are witnessing changes in dealership behavior that are required for eContracting to become the norm, and we have seen eContracting momentum grow. No one in the industry was expecting eCcontracting to be an overnight success, but by now, many did think that it would have gained more widespread acceptance just based on the speed of funding benefits.
Good and bad things come to the dealership with new technology. The good things are usually obvious like being able to send a single credit application to multiple vendors with the click of a button, or being able to analyze mass amounts of inventory data to improve profits. However, with the ease and access of technology, those with ulterior motives have managed to get very creative in stealing or manipulating information for their own personal gain. Due to this, many federal and state regulations have been passed that force dealers to take more precautions than ever in validating identities as well as protecting their customers personal information.
Title III of the USA Patriot Act authorized a measure to protect our financial system from money laundering and terrorism. Changes were then made to the Bank Secrecy Act requiring financial institutions to check those that they do business with against lists maintained by the Department of Treasury’s Office of Foreign Assets Control (OFAC). The surprise for dealers came when the changes categorized automobile dealerships as financial institutions and required them to comply, placing new burdens on them.
Credit bureaus often offer OFAC screening, but other products can compliment the bureaus by helping dealers fulfill more obligations under the law. Venneri explains, “You must screen all customers including cash sales, service sales or other transactions not financed in the dealership. Products like ExactID™ allow dealers to comply by performing an OFAC screen on all customers, not just those you finance. It also provides detailed instructions on what a dealer should do if they encounter a hit on one of the OFAC lists.”
Once you have cleared that hurdle, you still have the FTC safeguard rules to comply with. DealWatch™ is a system created by DealerTrack which facilitates the adherence to a compliant sales and finance process in the dealership. “Imagine if your F&I manager was able to quickly recall a credit application, or electronic customer signature indicating intent at anytime without shuffling through hundreds of deal jackets,” said Jason Barrie, senior manager of product marketing at DealerTrack. The reduction of liability exposure for paper files is huge and when you factor in time savings, storage cost and eventual disposal fees, the difference can be significant, even for small volume dealerships.
Often technology and ongoing regulatory changes direct the course of the automotive industry. As dealerships implement this new technology, might we, as consumers serve ourselves at the dealership in the same manner that we do at the airport? Walk up to the kiosk, input your credit information, get approved, select a payment option, complete your own sales contract and a sales person will bring your vehicle to you. It might be a bit far-fetched concept for the average dealer today, but for a few innovative thinkers, it will soon be reality. Regardless of where technology and regulatory changes take the industry DealerTrack has every intention of being there for the dealers.
Vol 3, Issue 8
Auto retail veteran and F&I products expert Paul McCarthy has joined AUL Corp. as vice president of national sales.