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Net Prophet - by Dylan Tweney

June 15, 1998

How I tried to finance my car purchase online and nearly went crazy

The Web is ideally suited for selling consumer-finance products. Loans are complicated, paperwork-intensive, and difficult to compare. Selling them on the Web seems like an easy way to make the process easier, faster, and more pleasant for everyone involved.

There's just one problem: The people who work in consumer finance aren't yet ready to deal with the Web. Given my experience, they may never be.

When my wife and I bought a Toyota pickup truck recently, we decided to try financing it through CarFinance.com (http://www.carfinance.com). It sounded like a good idea: You fill out an online application, and if it is approved, CarFinance.com mails you a blank check valid for any amount up to a specified maximum. You take the check with you to the dealership, and when you buy a car they fill in the exact purchase price and cash the check.

Simple, right? CarFinance.com offered us a good rate, the application was painless, and we had our check within days.

Unfortunately, there's a catch. Before CarFinance.com will cash the check, the company requires the dealer to fax them a few documents, such as the bill of sale, proof of the buyer's income, and proof of car insurance.

That requirement almost unhinged the whole deal. I didn't know it at the time, but the dealer deposited our check without sending in the required documentation. When the check bounced, the dealer called us demanding to know what happened.

What followed was a week of frantic phone calls. CarFinance.com's customer service representatives weren't able to offer much useful information, and it was with great difficulty that I finally determined the source of the problem -- the missing documents. It didn't help that CarFinance.com is a subsidiary of banking conglomerate NationsBank, and that a confusing array of other NationsBank subsidiaries around the country are involved in the venture.

Then the finance people at the Toyota dealership balked at faxing the documents, considering it extra paperwork. They steadfastly refused to understand the special circumstances of the online loan. Ironically, they're located in Redwood City, Calif., in the heart of Silicon Valley, where many potential customers are likely to be Web-savvy. But in this matter, the dealer's finance department proved as clueless as anyone.

Eventually, I persuaded them to send some documents, while I faxed the remainder myself. As of this writing, I am still waiting for CarFinance.com to confirm that they have all the documentation they need. Once they do, I'll call the dealership and tell them to resubmit the check.

So what started as a simple online loan application turned into a consumer nightmare that required my spending a worrisome week making phone calls and sending faxes.

Part of the problem is the inability of the dealer's finance department to handle anything out of the ordinary, even if it's something as straightforward as putting a few documents in the fax machine and pushing Send.

Another big part of the problem is CarFinance.com's customer service department, which just doesn't have enough real-time information on each account to be able to help when something goes wrong.

Without dealer acceptance, and without adequate customer service, CarFinance.com will never succeed. In this case, the promise of fast-moving commerce on the information highway ran smack into the brick wall of the real world.

Dylan Tweney edits InfoWorld's intranet and I-commerce product reviews. He welcomes your comments at dylan@infoworld.com.

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