Most dealerships use scanning solutions to create digital documents, but there are several reasons why scanning is not the ideal solution for digitizing documents. No matter how fast your scanner is, it still takes time. Scanned documents are created and managed by humans, which means there is always room for human error that makes retrieval of documents difficult.
Additionally, some states still require wet signatures, which means dealers are required to store paper documents for seven years. For many dealers, both scanning and filing physical documents is a redundant exercise.
Fortunately, a shift to the use of electronic PDF forms is underway. States, banks and auto dealer associations are finally making the changes necessary to enable digital deals. This is a game changer for dealerships everywhere.
Within the next two years, most dealerships will use digital deal jackets to allow customers to e-sign forms either at the dealership or remotely. If state laws allow you to switch to digital deals now, there’s no reason to wait. The technology exists now to deliver you the following benefits:
1) Improve Customer Satisfaction
In nearly every other industry, paper forms are a quaint notion from the past. File cabinets are virtually obsolete.
Consumers no longer prefer a fully-digitized process, they expect it. When you buy a Tesla, there is no paper involved. All documents are digitized and you walk out the door with a USB stick.
The ability to create digital deals is also the first step to enable digital retailing, another trend that consumer demand is driving. Why should consumers spend half a day at your dealership, when they can choose to simply visit for a test drive (if desired) and then purchase the car later, online, at their convenience and have it delivered to them at their home or office?
2) Reduce Costs
Digital deals will not eliminate having to pay a licensing fee per form. However, the licensing fee for a digital form should be less and there is virtually no “paper waste” when a form doesn’t line up or print properly. How often does something change half way through a deal and a new form has to be used? Electronic forms should save you hundreds of dollars per month in form fees.
Additionally, the amount of storage space required to store millions of documents can gradually be reduced. The cost savings associated with digital deals is significant.
3) Saves Trees
If the average deal jacket contains an estimated 250 sheets of paper and dealerships are averaging 2,000 (new and used) deals per year, that means your dealership is storing about 500,000 sheets of paper every year.
One tree produces about 80,000 sheets of paper, which means approximately six trees are harvested annually for all your paper deals.
If the 16,708 franchise dealerships in the U.S. all switched to digital deals, we would save more than 100,000 trees annually as an industry. If independent dealers go digital as well, that number would double.
4) Improves Workflow
Inevitably, implementing digital deals will require a process change in sales and F&I. This is probably the largest hurdle that dealers will have to jump in order to go fully digital. Traditional sales and F&I roles may need to be merged or adapted to a more streamlined and faster digital process.
With the advent of digital retailing solutions, many industry experts predict that salespeople will evolve into product or selection specialists, while F&I and/or senior sales managers will manage the entire sales process from beginning to end.
From your customers’ perspective, this provides a seamless, faster and transparent experience. However, your employees might be reluctant to change. To mitigate pushback, start researching digital deal solutions now, so you have plenty of time to plan for process changes and how they’ll impact your organization.
5) Improves Compliance
Finally, digital deals make it easy to meet compliance obligations. The identity verification process, privacy policies and credit score disclosure notices can all be embedded in online applications.
Data from online credit applications will automatically populate e-contracts, reducing data entry errors. An online deal process eliminates the passage of personal information on paper through several pairs of hands, potentially exposing data that you’re required to protect. Electronic F&I menu presentations also make it easier to ensure that all your products are presented in a consistent and compliant manner.
If you haven’t yet looked into digital deal solutions for your dealership, the time is now. Consumer and dealer demand has existed for a while, but now technology solutions and state laws can make digital deals a reality. Soon they’ll be coming to a dealership near you.