Are your auto finance compliance processes—or lack thereof—holding your dealership back from faster funding?
When you have a customer in front of you, and she’s ready to buy her next vehicle, those endorphins start flowing, and you kick it into high gear to make the deal happen. Like most auto salespeople, you’ve got your eye on the prize and keep telling yourself you just need to push forward until you see your customer happily drive off the lot.
However, once those tail lights begin fading into the distance, you hear that clock start ticking – it’s time to get that purchase funded as quickly as possible.
In the world of auto finance compliance, fast funding is vital. Until your dealership receives payments for the vehicles you sell, that money is just stuck in purgatory and isn’t benefitting your business in any way, shape, or form. There’s a big difference between saying your friend owes you $25,000 and having $25,000 in your bank account, right?
It’s easy to blame the finance company when funding gets delayed, but frequently, these hold-ups can be shortened or entirely avoided with more attention to auto finance compliance and proper processes within your dealership.
Consider these questions about auto finance compliance to speed up funding
It’s time to do an informal auto finance compliance audit to figure out what your dealership is doing well, and what it could be doing better to ensure prompt funding.
1. In your dealership, who’s in charge of packaging up financial paperwork and contracts?
Do you only have one person on staff responsible? Does anyone and everyone send out this type of information? In general, what works best for most dealerships (depending on size) is somewhere in the middle of those two scenarios.
Train more than one person on the completion and sending of financial paperwork for funding – you never know when an employee will be out sick or on vacation. Still, it’s helpful to assign specific individuals to own this task within your dealership. Accuracy is paramount, and you’re not likely to achieve it if you let everyone in the building touch financial paperwork.
2. Do you use the checklists the banks provide?
You know those handy dandy compliance checklists your lenders give you? Do you use them? Or do you use them to support your new origami hobby? The lenders you work with aren’t all the same – each one may like things done a little differently than the other. Stop thinking, “I’ve done this a hundred times, I know how to submit a package,” and shift your mindset to “I’m only human and can make mistakes. If I always consult the checklist before sending, I will probably get money faster.”
Incomplete packages are the top reason why funding gets delayed, so swallow your pride and always, always, always use the lender checklists. Even better, use the checklist, and then have another trained employee double check your work against the checklist. Quality control only takes a few extra minutes, can save you countless dollars, and helps you maintain good relationships with your lenders.
3. Does your dealership office communicate well with your F&I office?
Dealership offices usually handle the contracts, but what happens when there are problems with funding and auto finance compliance in your dealership? There needs to be an open line of communication between these two offices so that in the event funding gets held up, you can contact the F&I office immediately and resolve the problems quickly.
Time really is money, so if prompt funding has become an issue for your dealership, don’t shy away from analyzing and improving your auto finance compliance processes.
Communicate any changes with your staff and ensure they are all aware of any rules or regulations. The faster your deals are funded, the sooner you can pay off your floor plan and ensure your dealership is always stocked with the latest in-demand inventory.
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