American Honda Finance Corp.’s new e-contracting system for powersports can provide funding in as little as a few hours, but the captive is working to integrate the technology with dealer management systems, dealers told Powersports Finance.
Through Honda’s e-contracting system, dealers can access a digital contract through an app on a tablet device. The consumer signs on the tablet, and the dealer submits the application to Honda. The dealer can then track the progress of the contract through approval and funding.
Previously, dealers had to print out finance contracts on a Microline printer, and mail them to the lender. Contracts with errors would get sent back to dealers, and they would have to restart the funding process. Funding could take as long as a week, Pete Clarkin, finance manager of Powersports East, told PSF. The Bear, Del.-based dealer has used Honda e-contracting since the pilot stage in October.
With the addition of e-contracting, Honda has gone from “eighties technology for funding” to “bypassing everyone else with one big step,” Clarkin added.
“With the new system, the way it’s designed, it’s foolproof,” Clarkin said. “The app is very easy to use. You take pictures of the supporting documentation like the title application. The longest I had to wait to get funded, I think, was six hours. So, we go from a week to getting funded that day, and for a small business trying to make payroll or just making sure that we can pay off the floorplanning on time, it’s wonderful for us.”
One dealership’s finance manager, who declined to be named, complimented the faster funding time as a benefit of the technology, but felt that taking pictures of supplementary documentation slowed the process. Since joining the e-contracting in December, the dealer has done 20 contracts with Honda, nine of which had to be resubmitted because the pictures were unclear.
Another dealership was still getting its customers — who are “more old school” — used to signing on a tablet, a finance manager who declined to be named told PSF. Additionally, the e-contracting does not fully integrate with the dealer’s management system, which forces it to reenter the information of the deal. The finance manager was told that Honda was working on a solution to the issue.
American Honda Finance Corp. did not respond to request for comment by press time.
While none of the dealers PSF spoke with were doing more deals with Honda than when it was a paper process, Powersports East’s Clarkin felt that the quicker funding made it easier to work with the captive.
“I would say the anxiety level as a dealer, as a finance manager for a small business, when we are relying on that money to come in — I’m used to getting funded through Synchrony, Sheffield, Yamaha Financial within a day,” Clarkin said. “Not having to wait [as] long [for Honda] definitely lessens the anxiety. If there’s an issue with the contracting or anything is missing, it’s easier to fix if you know it right away versus if you mailed it off and are waiting.”