Auto Industry Transforms Signing on the Dotted Line

As fast as dealers and lenders move along the pace of increasingly digital transactions, those utilizing remote signing tools should beware: Not all e-signatures are the same.

Andy Mayers

June 10, 2022

3 Min Read
e-signature (Getty)
Remote signing becomes integral part of digital car-buying experience.Getty Images

Consider this: nearly 20% of car buyers are considered primarily digital. This means they’ve done more than 50% of the work to buy a vehicle online.

Though only 29% of buyers applied for financing online for their most recent vehicle purchase, 96% are willing to do so, according to a study published by Cox Automotive. The 2021 Cox Automotive Car Buyer Financing Journey Study revealed that buyers who completed key financing steps online saved time and were more satisfied with the time they spent at the dealership than buyers who completed the same steps in person.

Dealertrack has reported more than 94% growth in the number of dealerships offering remote signing coupled with more than a 144% increase in the number of deals using remote signing. This new reality of consumer preferences is driving a major shift in automotive retail toward e-commerce vehicle transactions.

With Transunion Financial Services projecting 28.9 million auto loan originations for 2022 alone, lenders must evolve their processes to give consumers the ability to purchase vehicles any time and anywhere.

Remote signing, one of several digital retailing solutions retailers have quickly adopted, is significant in two ways. It has kept the industry moving forward during the shutdowns of the pandemic and can eliminate unnecessary paper. In addition to the resiliency factor, remote signing is effective in transforming the automotive retail transaction in terms of customer satisfaction and dealership profitability.

It’s all shopping until a contract is executed, and the rate of adoption by consumers, dealers and lenders truly affirms the shift to digital.

As fast as dealers and lenders are moving along the pace of increasingly digital transactions, those usomg remote signing tools should beware: Not all e-signatures are the same.

Anyone can put a digital signature on a document. However, the real asset the lender holds is the sales contract, and it must be the authoritative version, meaning it is the original and only copy of that document with a validated digital signature. Remote signing brings many secure and convenient features to this stage of the buyer’s journey, such as review copy, an audit log and multifactor authentication. It’s a crucial capability that future-proofs business continuity and ensures compliance.

Andy Mayers (2) (002).jpg

Andy Mayers (2) (002)

As the availability of remote signing technology expands as part of the e-commerce evolution, lenders can benefit by investing in the related technologies that will drive their own efficiencies, such as alternative deal structures, stipulation management and lights-out funding. Financing is a multi-party transaction, so it’s critical that lenders and retailers leverage frictionless processes.

As the ubiquity of using a mobile phone or other device to search for a car has moved into the realm of contract signing, it’s imperative that the industry have sophisticated and secure technology that enables car buyers to complete business without having to enter the dealership to wrap up their purchase.

Remote signing is the tide that rises all boats – for lenders, dealers and car buyers. Lenders gain data security and an accurate reflection of the contract process with the utmost confidence that the contract is securitized via an audit log and with authoritative copy. Dealers can provide signing ceremonies for buyers anytime, anywhere. And the buyers benefit from ease of use and being anywhere they want to be.

Andy Mayers (pictured above, left) is a Lender Solutions Strategist at Cox Automotive.

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