Nissan Dealer Calls on Subprime Lenders to Leverage E-Contracting

Nissan Motor Co. “demands” all of its dealerships to use e-contracting or digital applications, but not all lenders leverage the technology, Saif Kadri, sales manager of Carson Nissan, told Auto Finance News.

“A lot of the subprime lenders are not using e-contracting as much as the captives and more prime lenders,” Kadri said, naming AmeriCredit, Exeter, Flagship Credit Acceptance, Veros Credit, and Westlake Financial Services as a few of the subprime lenders his dealership uses. 

With the prime lenders, Kadri said e-contracting has worked to be fast and efficient. “The dealer principal loves [e-contracting] because they get their money in their account the same day the contract is signed,” he said.

On the prime-end of the spectrum, Carson Nissan typically works with Ally Financial, Chase Auto Finance, TD Auto, Citizen Bank, Capital One, and Nissan’s captive finance arm, Nissan Motor Acceptance Corp.

OEMs have their dealers work with e-contracting to get contracts into the system quickly, and now “traditional lenders are investing in the technology to be able to do the same thing,” Danny Cox, F&I Director at Ken Garff Automotive Group, told AFN.

Ken Garff Auto works with 53 dealers in six states with OEMs including Ford, General Motors, Chrysler, Nissan, Toyota, Honda, Porsche, Audi, Ferrari-Maserati, Volvo, Jaguar, and Land Rover to name a few — all use e-contracting, Cox said.

“We are starting to see more lenders with the ability to take documents electronically and that’s a huge deal for us. We sold 115,000 units last year — if you look at average days to run, floor plan rates, and even shipping costs — that’s a saving of $1 million or more if we e-contract all of our deals,” Cox said.

E-contracting also helps finance managers make fewer mistakes, which is one of the main benefits, Kadri said.

“If the customer leaves and you make a mistake on a paper contract, then they have to come back into the dealership and they can change their mind and not sign anymore, then you have to take the car back because the contract isn’t good.”

The only problem with e-contracting is if the system goes down, “then we’re in trouble,” Kadri said.

However, Ken Garff has a backup plan in the event that the system goes down. “We have all our forms in a PDF format — we call it a stack. It’s one document that has all the forms where we can go ahead and enter in the customer name and information all at once and it prefills the rest of the PDF document,” Cox said. “It’s a little time consuming, but it’s a lot better than having to do it on paper.”