Save a tree — use less paper. Cutting down on paperwork can also save a headache, and grow your business.
Ent Federal Credit Union, a small community credit union serving Southern Colorado, had a banner year last year, according to William Vogeney, executive vice president and chief lending officer, who estimates that within its auto finance department, the month with the highest volume in 2014 was about 75% to 80% higher than the FI’s all-time record high month, Vogeney said.
“It definitely did tax our systems though, and how we do things,” Vogeney said. “So we really don’t need to make any more loans from what we made in 2014, but we probably need to find a way to make the more efficiently.”
One decision the bank made in order to boost efficient dealer relations was to sign up for CUDL Fax Funding, said Scott Gennerman, the bank’s indirect lending manager.
“The dealership can just fax in the paperwork to the server and then we can fund it through that and then we’re not receiving the originals,” Gennerman said. “So there’s less paperwork for the dealership and there’s less paperwork us.”
During faxing, a digital copy of the document is also created.
CUDL Fax Lending is described as a “functionality within the CUDL platform” by Marci Francisco, vice president of automotive business and development at CUDL, which allows dealers to send scanned documents and images to the lender, via fax, after which they are automatically attached to the dealer’s system, she said. Lenders then have the ability to fund a loan in the same day.
“It’s about the speed of doing business, and receiving funds quickly is critical to make sure that you’ve got a great turn on your inventory, and money is moving effectively,” Francisco said. “It allows the dealership to stay on top of their business quickly, so they don’t have deals out there that are delayed for three or four days. It can happen same-day.”
Improving decisioning speed and boosting efficiency is key for lenders today, Vogeney said, but lenders should be mindful of making decisions that are right for both the lender and dealers.
“I can think of a few companies that tried to put in some technology and cut down on paperwork, but what it did was create more work for the [dealer’s] finance manager and the lender benefitted from it,” Vogeney said. “But if you’re going to do something like that, it can’t be more work for yourself, it can’t be more work for a dealership employee. If you’re switching work from your employee over to a dealer employee, that’s probably not going to go over very well.”
One program Ent offers to ensure flexibility for dealers is what it calls a “Coupon,” or as Gennerman explains, a list of options that the dealer can use on top of the CU’s regular flat system that it operates with, such as additional term, or a lower rate in lieu of more flats.
“Because we’re not at the closing at the dealership, it gives the dealer the flexibility to have what they need, and what the customer is willing to take,” Gennerman said. “Where we gain in efficiency is that they don’t need to call an underwriter to get that deal done. So if they’re closing a deal at 10:00 at night, and no one is here, they know that they can go to 2.49% or whatever the rate is, and give up a little bit of their flat to make that deal happen.”
Dealers have always asked for flexibility in the marketplace. That’s not something new, Gennerman said, so Ent has worked to consistently maintain a partnership with its dealers in which they feel empowered.
“They’re a big part of what we do, and we’re a big part of what they do,” Gennerman said. “So we keep that communication open and let them know what the market conditions are and adjust as needed, for them and for us.”
Ent’s dealer programs were particularity important the last year, Gennerman said, when auto sales were strong and finance managers were pressed for time. “Between the flexibility and the checklist loan program, we make it easy to do business with us,” Gennerman said. “And when they’re extremely busy, they’ve got to make every deal as easy as possible. It wasn’t necessarily in response to that, but it certainly helped us last year, we think.”Like This Post