TAMPA BAY, Fla., Jan. 13, 2014 /PRNewswire-iReach/ -- In 2009, automotive sales hit a low not seen in 30 years. The recovery in automotive sales has brought with it a demand to innovate and modernize—but the majority of finance and insurance (F&I) activities are still stuck in paper overload. This leaves the automotive-buying practice disjointed and unorganized. The Digital Deal™, developed by Open Dealer Exchange, LLC (ODE), a joint venture with ADP®, and Reynolds and Reynolds, was established to streamline the auto-buying process with automated methods specifically designed for better management of the automotive industry. Digital Deal™ officials say automation drives customer satisfaction and confidence by speeding up and standardizing fair lending practices—ultimately protecting the consumer and providing better stabilization of the American economy.
Currently, the auto industry still relies heavily on paper-based processes, and despite the high number of sales in recent years, studies indicate the industry could benefit from improvements. The length of time buyers spend at the dealership has increased to an average of 4.3 hours in 2011 from 4.1 hours in 2010 (1). ODE's Digital Deal™ reduces the finance cycle by one-third and eliminates the high probability of human errors— which ODE officials say makes the auto lending process open and transparent. In essence, the Digital Deal™ revolutionizes the car buying experience.
The Digital Deal™ was designed with both dealers and lenders in mind. Its goal is to assist dealers in providing quality data to lenders in real time and eliminate costly fines due to new banking regulations put in place by the Consumer Financial Protection Bureau (CFPB). Still, only a few companies have taken steps to digitize, such as:
VW Credit Inc., Volkswagen Group of America's captive finance company, will spend $30 million on information technology improvements over the next two years, CFO Christian Dahlheim said. One goal is to digitize every form that goes to VW Credit, starting this year for some dealers.
With the investment, VW Credit is joining the ranks of other captive finance companies that envision car buyers signing their contracts on iPad tablet computers, no ink required. Fans of the technology say it will make the process speedier and more professional, and also cut down on errors in contracts (2).
"Auto loans have an attractive risk-reward ratio, making them a winning business proposition for banks and finance companies," explains Steve Luyckx, ODE General Manager said. "An electronic system means fewer or no mistakes and incomplete forms, which reduces overall acquisition costs—translating into faster funding and better cash flow for dealers."
"The recovering industry is causing many dealers to pay even more attention to innovative retail methodologies," added Luyckx. "Several dealer groups and their lender counterparts are leading the way with game-changing ways of selling automobiles, all of which are supported by the key components of ODE's Digital Deal."
One of the largest dealer groups in the country recently announced plans to go digital. The company is working with ODE to implement the plan, and ODE and its DMS Partners will cover 100% of what the group is going to offer.
Through its two divisions—Lender Services and Provider Exchange Network (PEN)—ODE enables its customers to deliver innovative solutions for their dealers, such as contract data validation, eContracting, an extensive electronic forms library and forms preparation.
ODE eliminates the need for dealers to log in to multiple systems or re-key data into various applications during a vehicle sale. This results in increased operational efficiencies, reduced contract errors and a more streamlined process with a lender or provider's franchised dealerships. The ultimate measures are an improved customer satisfaction index, and reduced time, leading to increased profitability.
Luyckx says a smoother loan process makes buying easier, encouraging customers—particularly millennials—to participate in the new car experience.
ODE officials will attend the National Automobile Dealers Association (NADA) trade show in New Orleans in January (24-27), and will be open to interviews and Digital Deal demonstrations. Digital Deal™ is a registered trademark of Open Dealer Exchange, LLC.
For more information about ODE and its services, visit www.opendealerexchange.com.
About Open Dealer Exchange (ODE):
Open Dealer Exchange (ODE) was founded as a joint venture between ADP® Dealer Services, Inc., and the Reynolds and Reynolds Company. ODE is a technology leader within the automotive F&I process for connecting lenders and F&I product providers with their dealer partners throughout the United States and Canada. By providing a direct connection into the dealership's main network—the DMS—ODE virtually removes the need for the dealer to leave its system-of-record during the F&I process. This innovative process results in increased operational efficiencies, reduced contract errors, and a more streamlined process with a lender or provider's franchised dealerships. With expert management and dedicated team members hailing from diverse technology, automotive and financial arenas, ODE remains committed to providing its customers with the most innovative solutions and robust data exchange. For more information on ODE and its divisions, please visit www.opendealerexchange.com.
- "2011 U.S. Sales Satisfaction Index (SSI) Study." J.D. Power, 30 Nov. 2011. Web. 11 Dec. 2013. jdpower.com/content/press-release-auto/xWUuksT/2011-u-s-sales-satisfaction-index-ssi-study.htm.Healy, James, and Fred Meier.
- Nelson, Gabe. "VW Finance Arm Pushes to Go Paperless." Autonews.com. Automotive News, 27 Mar. 2013. Web. 11 Dec. 2013.autonews.com/article/20130327/FINANCE_AND_INSURANCE/303279978/vw-finance-arm-pushes-to-go-paperless.
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SOURCE Open Dealer Exchange