Moving to eliminate errors in processing point-of-sale buyer contracts and improving customer satisfaction, Chrysler Financial plans to expand its paperless electronic system called “eContract” at its dealerships.
Chrysler Financial is a business unit of DaimlerChrysler Financial Services Americas (DCFSA), with assets totaling nearly $64 billion and serving 3,868 dealerships.
Kelly L. Mankin, vice president-Chrysler brand marketing at DCFSA, says more than 100 Chrysler Group dealers in 11 states have begun using eContract since its launch in 2005. He expects that number to increase tenfold by year's end and to reach 2,000 by the end of 2007.
Mankin says no other auto maker has a system like eContract, which is an outgrowth of a contract verification system launched in 1996. The network now supports nearly four out of five Chrysler Group dealerships.
Chrysler also is partnered with General Motors Corp., Ford Motor Co. and Toyota Motor Corp. in the “Route One” automated credit-application management system. Under Route One, dealers need only enter information once to cover credit checks at financial institutions. “This saves dealers time and money by eliminating the need for a bunch of faxes or phone calls,” Mankin points out.
EContract dovetails with Route One in that the next step in the process of buying or leasing a vehicle is the contract — a process that can be fraught with snafus because of the complexity involved, Mankin says.
Typically, a finance and insurance staffer at the dealership completes the contract. “This is open to a lot of mistakes,” he says. “Outdated or wrong forms may be used, and even things like aligning the document properly on the fax machine can cause problems; they must align right to meet truth-in-lending laws.”
While not blaming dealers or F&I personnel for problems, Mankin says the current method of handling contracts can be extremely cumbersome.
Out-of-date forms may be used inadvertently, and “contracts can pile up over time before they're sent to us or banks,” he says. “It may be a week before we even see a contract. Then they've got to be re-keyed and re-checked in our system before we can send out bills. The whole process can take up to 30 days,” he says.
Enter eContract, which Mankin says can reduce all of this time-consuming work to “a matter of minutes” — and with accuracy built-in at the source.
“Dealers construct the contract data and send it (electronically) to us where we go over 250 fields to assure accuracy for items like incentives and residual values. We handle hundreds of different contracts, which are constantly changing along with federal state and local laws and regulations. All of this is included in eContract programming, and we guarantee accuracy” in the final contract, Mankin says.
Dealers like e-Contract because, with swift contract processing, they can reduce their “float” — the time between signing a deal and getting it through financing — which can be costly: Until then, the vehicles remain in the dealer's inventory, racking up interest charges. The faster the contracts become effective, the lower the dealer's costs.
Improving customer satisfaction also is a key goal of eContract, Mankin says. Because it aims to eliminate errors or misunderstandings, disputes with buyers over terms and conditions theoretically disappear.
“The dealer retrieves the contract (from Chrysler Financial) from his management system, prints out a draft for the customer to see, and if he agrees, then he signs on a signature pad. This becomes a legal document. The customer gets a copy on the way out and the dealer sends us a copy electronically.”
Except for the buyer's copy, all printed information is eliminated.
Mankin says eContract is available to Chrysler Group dealers without charge.
“What's in it for Chrysler Financial? It eliminates financial errors, increases customer satisfaction and adds value to our dealers — and maybe we become the preferred lender,” Mankin says.