With another month closing on Wednesday, Ignite Consulting Partners mentioned firm compliance experts often are peppered with questions at this junction on the calendar about independent dealers creating their own retail installment sales contracts rather than relying on the documents within their dealer management system (DMS).

Through its Tip of the Week, Ignite emphatically replied to those operators by saying, “not so fast!”

Firm experts elaborated about their reasons for taking such a strong stance.

“We’re big believers in keeping things simple, and, although we know that there’s a charge each time a transaction is booked within the DMS, in the long run we think it’s both safer and cheaper to use the contracts provided,” Ignite’s experts said.

“First, creating a proprietary RISC can be pretty expensive on the front end. The contracts already being used are licensed from providers and protected by copyright law, so you just can’t duplicate them,” they continued. “Secondly, creating your own RISC would then mean that you are responsible for the upkeep of the document and any changes that are needed as a result in a change of law, or even caselaw. Keeping up with all of that can be pretty daunting.”

Ignite also touched on other paperwork that some dealerships create themselves.

“Lots of you have your own proprietary ancillary forms that are also used at closing, and those are a little bit of a different story,” Ignite said. “Lots of times, it makes sense to create and maintain your own because they deal with a unique aspect of your business.

“We do recommend that these be reviewed annually just to make sure they still fairly and accurately represent your business needs,” the firm added.

Whether it’s assistance with those documents or other compliance matters, Ignite can be reached at info@ignitecp.com or (817) 900-8754.