As F&I director for the Utah-based 52-dealership Ken Garff Automotive Group, Danny Cox knows the challenge of rolling out e-contracting in an industry that’s historically not an early adapter of the latest technology.

“There is a reluctance and a familiarity with doing things old school, and e-contracting adoption depends on a store’s culture, its management, and the tenure of the F&I manager,” he says.

An estimated 50% of U.S. dealers use e-contracting to some extent, and a RouteOne executive says things are looking up. “There is rapid acceleration in its adoption curve,” says Chief Operating Officer Brad Rogers.

RouteOne had its first booked e-contract successfully funded in 2006. By 2015, e-contracts booked through RouteOne resulted in more than $100 billion in funded deals. 

Today, over 7.5 million e-contracts have been booked through RouteOne eContracting, resulting in over $200 billion in funded deals.

E-contracting is touted as reducing paperwork, reducing errors and speeding up funding and cash flows.

“If consumers are to buy cars and F&I products online, e-contracting is a critical component of that future state,” Rogers says. “The future state will allow consumers to shop from home, calculate payments, review their contract terms and conditions, and then work with the dealership to set up their delivery appointment.”

Of that future state he says technology is ready for the online purchase process, “and we are in the process of finalizing our navigation of the regulatory issues that arise with a completely online transaction.”

Regulations in some U.S. states remain a hurdle, but “we believe that these matters can be successfully addressed sooner rather than later,” Rogers says.

Cox wants to have Garff dealerships ready for a seamless online future.

The group’s Nissan stores are early e-contracting adaptors, driven by Nissan Motor Acceptance’s e-contracting requirement.

Forty-two percent of Garff Automotive’s dealerships actively use e-contracting, with the highest volume coming from Nissan and Ford dealerships.

“We’ve just completed a lender review and consolidation and now we’re focused on increasing efficiencies,” Cox says.

He believes e-contracting will improve deal and cash flow. “If we can eliminate three to four days in deal funding – e-contracting should drop that to a day – that’s a major savings in interest money, about $600,000 to $700,000 annually, based on an average floor plan rate and cost of shipping paper documents.”

Part of his plan to make F&I more efficient includes allowing F&I managers just a day to close out the month, not three to four as they had.

Turnover in the office contributes to slow e-contracting adoption. “As a result, encouraging dealerships to realize e-contracting’s advantages requires a continual training and certification effort,” Roger says.

In 2016, F&I manager turnover was 40%, an increase of two points compared with 2015, according to the National Automobile Dealers Assn. Dealership Workforce Study.

“F&I manager turnover is increasing at the same rate as the industry in general, as Millennial talent replaces senior F&I managers who move up or out of the industry,” says Ted Kraybill, president and founder of ESI Trends, the firm that conducts the study in partnership with NADA

As F&I managers get more comfortable using e-contracting more are certain to embrace it.

“We’re familiar with electronic menus and signature pads, so from that standpoint the use of F&I technology is helping us move e-contracting forward here, but it has not been a priority until now,” Cox says.