Online credit applications can pare the dealership F&I process


Greg Cole can’t give his customers credit, but he can find a lender that will.

And he can do it more quickly and efficiently when customers go to one of his dealerships’ websites and complete a credit application prior to visiting the dealership to buy a vehicle.

That gives the finance and insurance staffs at his Athens Chevrolet in Athens, Ga., and Cole Chevrolet in Pocatello, Idaho, the opportunity to arrange financing ahead of time — a move that can pare up to 30 minutes from the average vehicle purchase transaction time of 90 minutes to two hours.

It also prevents the purchase transaction time — the time between when a consumer selects a specific vehicle and completes the F&I process — from stretching an additional “two to three hours,” for credit challenged consumers whose loan applications generally require more attention and documentation, Cole said.

“The faster we can move the transaction, the happier they generally are,” he said.

“When you’ve got somebody sitting here for two or three hours, they’re generally not very happy when they take delivery of their car — they become very impatient. It very much impacts’ customer satisfaction scores.”

According to the Cox Automotive Future of Digital Retail Study released in January, consumers want to start their vehicle buying process online.

Eighty-three percent want to complete one or more purchase steps online, and 89 percent want to sign final documents at the dealership, the study concludes.

About 30 percent of Cole’s customers submit credit applications prior to getting to the dealership, having studied his inventory online and knowing exactly which vehicle they want, he said.

Putting customers at ease

But many customers are nervous about submitting personal information electronically. Some of those customers, once they make telephone contact with a person at his dealership, will part with personal information on the phone or go ahead and fill out a loan application, Cole added.

Then there are the customers who want to make sure the dealership has the vehicle they want.

“It’s, ‘We’re looking at the red pick-up, do you still have it? I don’t want you running my credit information if you don’t still have the car I’m interested in’,” Cole said.

Though it is quite common for consumers to apply for loans via a dealership’s or lender’s website or mobile apps that connect to digital marketplaces, dealers should take precautions, too, said Dave Robertson, executive director of the Association of Finance and Insurance Professionals.

For example, dealers should always make sure that financial forms include permission from the consumer to obtain their credit report, he said.

To cut down on identify fraud, dealers should include questions on the application that asks consumers to provide information such as the address of their previous residence or the balance on their mortgage within a range of $10,000, he added.

“Both of those things I can confirm on the credit history report,” Robertson said.

Identify, eliminate speedbumps

Like virtually all dealers, Cole knows where the finance speed bumps are. Having credit applications ahead of the dealership visit helps his F&I managers alert consumers when to gather documentation such as tax returns, payroll check stubs and utility bills, he said.

“You may need a longer term, a lender that does 84 months, or you may need a couple more verifications to get that customer a low interest rate, or you’ve got a customer that is upside down (in their current vehicle loan), and we’ve got a lender that does that type of financing,” he said.

“If we have this (credit application) at 8 a.m. we can work on it all day. But if you come in in the evening, I’m sorry that lender is gone for the day.”

Today's top headlines