When a dealership is considering a switch to electronic contracting from traditional paper contracts, it’s important for them to figure the value they’ll receive from modernizing their processes.
Some paper contract expenses are easy to identify:
- Paper, ink, toner
- Maintenance of copiers and fax machines
- Shipping costs and related materials
Then there are the expenses related to the time the process takes. Dealertrack data shows that the average time in transit for paper contracts is five days. In the meantime, holding costs accumulate and cash flow is halted.
Doing the math
A Savings Calculator can help dealerships estimate their projected savings using digital contracting.
Here’s how the calculator works:
Let’s say a dealership has an average of 200 contracts each month with an average loan value of $18,000. Their floorplan rate is 3% and it costs them $15 for overnight shipping and $2 to prepare basic ancillary documents on paper for each deal. Their contract in transit time using paper contracting averages 5 days. Plugging these figures into the calculator, we find that using eContracting for all their contracts would save them $4,879 per month, which adds up to $53,765 per year.
Interested in seeing how your dealership’s numbers add up? Use our Savings Calculator to find out.
Selecting a cost-effective eContracting solution
To maximize cost savings, it’s important for dealerships to choose a solution that doesn’t trade one type of expense for another. If an eContracting solution requires that a dealership purchase expensive equipment or pay a transaction fee for each contract they submit, it will take a lot longer to see a positive return on the technology investment.
An eContracting solution should maximize efficiency and time-savings so that the dealership staff has the capacity to work with more customers. That means a solution that requires less data re-entry and includes functionality to catch input errors and missed signatures to cut down on re-contracting is ideal.
Digital Contracting on Dealertrack uniFI is hardware-agnostic so it can be used on any device including tablets, touchscreens and laptops. And, there’s no transaction fee for dealers. Take into account the savings of submitting all deal documents to lenders instantly and getting funded as fast as the same day, and that’s the ROI dealerships are looking for.