Before the pandemic, Qvale Automotive Group had a digital retailing tool and the ability to allow customers to electronically sign documents from inside the showroom. When the coronavirus began to surge across the U.S. this spring, Qvale discovered that its showroom could be anywhere.
With the help of videoconferencing software and remote e-signing tools, which allow the customer to electronically sign documents from outside the dealership, the retailer offered customers wary of doing business in person a virtual option — and helped generate sales amid lower volume.
“I can go to Starbucks and sign somebody up,” said Geno Walsh, executive manager of retail operations for Qvale Automotive Group, which has 10 dealerships in California and Florida. “The whole Bay Area is my showroom. The whole South Florida is my showroom.”
Dealers across the country — fighting for survival as the pandemic shut down showrooms in many states and sent vehicle sales plummeting this spring — purchased new technology, plugged in retail tools and revamped digital processes to sell vehicles online when face-to-face wasn’t preferable, or possible. The pandemic is widely credited for accelerating the industry’s shift toward e-commerce, changes some insiders say moved the vehicle-buying process years into the future within a matter of months.
Auto retailers were helped along by software vendors that sped up development of tools and features, such as remote e-signing, which enabled customers to complete more of their purchases online. Executives at dealership technology companies said dealer interest in their products has remained high even after government shutdowns lifted and customers returned to showrooms.
Some dealerships found the software developed amid the crisis accelerated the financing process, making customers happier and employees more efficient. There could be bottom-line implications, too. Some dealers say their finance-and-insurance profits have improved with a change in software and process, and going digital in the finance office could get deals funded faster.
Going forward, the technology adopted this spring will help dealers smooth the transition between online and in-store transactions, a process known as omnichannel, several people said. And some dealers and tech vendors say the next wave of software innovations could build on this one, from greater availability of electronic registration and titling to a more fine-tuned digital financing experience.
The industry was moving in this direction, albeit more slowly, said Cheryl Miller, vice president of operations for Cox Automotive’s Dealertrack F&I Solutions, and “when COVID hit, it was kind of not optional anymore.”
Companies that offer financing and contracting products say dealer interest has snowballed during the pandemic.
In April, Dealertrack unveiled features that allow for a secure digital contract delivery and assisted remote e-signing, which allows a customer to electronically sign documents outside of the dealership. Ready Sign, which lets dealers add electronic signature fields to their own documents, followed in July.
Dealerships’ adoption of Ready Sign has been 97 percent since it was introduced, according to Cox data, and the number of deals signed with the help of Ready Sign soared by nearly 108 percent from July to November.
Darwin Automotive, which provides digital retailing and finance-and-insurance software to dealerships, has signed on at least 1,200 digital retailing customers so far this year, up from slightly more than 400 total digital retailing customers by the same point in 2019, CEO Phil Battista said.
Darwin expects to end the year with close to 1,800 customers using its digital retailing platform.
“Halfway through this year, we exceeded our sales plan for the entire year,” Battista said.
CDK Global Inc. said more than 3,600 dealerships were using its Sign Anywhere remote e-signature tool after it piloted it in March and April. That number has grown to 4,900, said Michael Seeman, CDK’s vice president of customer success and enablement.
The number of deals completed using Sign Anywhere stands at nearly 43,000, he said.
The tool is used most frequently at the end of the month, when dealerships are more likely to send documents to customers ahead of time to speed up the process when trying to squeeze in every possible sale, Seeman said.
“An average car deal could have anywhere from, depending on the manufacturer and the lender, 30 to 50 different documents that need to be signed,” he said. “If you can get a majority of those handled ahead of time, then when you come into the office, you can make the process much faster.”
Across Darwin Automotive, software tools have driven an additional $114 in average F&I profit per vehicle for its dealership customers, said Battista.
But the potential benefits of digitizing the finance office go beyond the bottom line. Software also can alleviate the bottleneck that can lead customers to wait hours to finish their deals.
For instance, Battista said, electronic paperwork can be emailed ahead of time rather than printed out while the customer waits. Customers can upload records before they arrive at the dealership. Multiple documents can be signed at once, rather than manually one at a time.
“The No. 1 complaint is the amount of time they spend in F&I,” he said, “so the target of these tools has to be: How do I cut that time in the F&I office?”
Glassman Auto Group, in Southfield, Mich., started piloting Dealertrack’s remote e-signature capability in the spring, and switched from paper to digital F&I product menus this year, said David Barash, Glassman’s finance director. The digital menus are used both in store and off-site.
In addition, customers are sent a questionnaire about their individual driving habits, which generates a list of products that best fit their needs. Allowing consumers to structure a deal based on their own circumstances is the biggest reason Glassman — which sells Kia, Hyundai, Genesis and Subaru vehicles — saw F&I gross profit rise at least 30 percent this year, Barash said.
Dealers often think they’ll be more profitable if the customer is sitting across the desk from a finance manager, who can read body language and other cues, he said.
“What we found is that the customer just wants a little bit more flexibility, and it made the process way more interactive for the customer,” he said.
“It turned it into a consultation,” Barash added, “rather than a sales pitch.”
About Darwin Automotive:
Darwin Automotive currently operates in all 50 states with over 6,300 dealerships subscribed to its programs and was recently recognized by Automotive News as a 2019 All-Star in Finance & Insurance. Darwin delivered 504,000 deals on its platform last month and is on track to deliver 6.5 million units for the year.