Under sunny skies in Las Vegas this week, officials from DealerTrack, the Garden City, N.Y.-based auto financing portal announced last week by J.P. Morgan Chase & Co. and Wells Fargo & Co., introduced their top officer.

But chilly winds from a Canadian company with a similar business model and plans to enter the U.S. market this summer may soon be bearing down on Mark F. O’Neil, president and chief executive officer of DealerTrack.

Mr. O’Neil was introduced Monday at this year’s National Automotive Dealers Association convention; he has been involved in auto finance since the late 1980s. He cofounded the used car superstore CarMax Group in Richmond, Va., in 1992 and ran its day-to-day operations. Most recently he was president and chief operating officer of Greenlight.com in Livermore, Calif., where he helped auto dealers use the Internet to increase business.

In his new job Mr. O’Neil will be up against the tentatively named DealerconX, an auto financing portal started in November by Bank of Montreal and CIT Vendor Technology of New York.

“We are expecting DealerconX to become a major player in the U.S.,” said Peter Martin, the company’s head of corporate development.

DealerconX, which plans to roll out its service in Canada at the end of this month, got a boost on Feb. 1 when Royal Bank of Canada in Toronto became a lender and equity partner. Royal will figure prominently in DearlerconX’s efforts to gain a foothold in the United States, where the bank has extensive operations.

Royal plans to bring two of its U.S. subsidiaries on board to finance auto deals through the network: Centura Bank in North Carolina, which Royal has a deal to buy, and Security First Network Bank, an Internet bank in Atlanta. A Bank of Montreal subsidiary, Harris Bank in Chicago, is also expected to join.

DealerconX is looking to sign up other U.S. bank partners. It has been talking with “two significant, household-name, peer-one banks,” said Richard Smart, vice president of specialized financing for Royal Bank, and those “discussions have been promising.”

Competing in the United States is going to be challenging, Mr. Smart acknowledged. “There are some incredibly well-entrenched players,” with DealerTrack the most recent entry, he said.

“But our research told us that the U.S. market is very fragmented” and that “there isn’t really an end-to-end solution for the dealership,” he said.

DealerconX officials said that they believed their technology goes a step beyond DealerTrack’s.

The Canadian firm has “Web-ified” the documentation required for auto finance, Mr. Martin said, so that not just approval for financing but the contact itself can be fulfilled electronically. The process still faces regulatory and cultural hurdles, such as widespread use of electronic signatures, but it is the wave of the future, he said.

“We will fundamentally eliminate any errors in the documentation process,” Mr. Martin said. “Documentation is received by the funder more quickly and correctly, so the dealers get their money faster.”

But Tony Langan, senior vice president of Chase Automotive, said that DealerTrack also plans to introduce “electronic contracting” by the second half — just in time to head off DealerconX’s targeted U.S. entry.

DealerTrack also will benefit from its “first-move advantage in the U.S. marketplace,” Mr. Langan said. Seven additional lenders are ready to join the network in the next month, he said. It has more than 4,000 U.S. auto dealers signed up for its service; DealerconX has more than 3,000 Canadian auto dealers.

DealerTrack was announced on Jan. 29 as a joint venture between the two banks and AmeriCredit Corp., the largest auto lending company in the United States. It is the first company of its kind involving large cash management banks: Generally the banks closest to dealerships are the financing arms of auto manufacturing companies such as GMAC and the credit arms of Ford and Chrysler.

Mr. O’Neil is a good fit for the company, Mr. Langan said.

“He’s not from Wells, Chase, or AmeriCredit, so he underscores the neutrality we want this company to have,” he said. “Lenders on the platform can feel comfortable they will be treated fairly and equitably. The plan is that no lenders have an advantage on the platform.”

Not in dispute is that Internet auto lending will be beneficial to dealers.

Sterling McCall Toyota in Houston, the second-largest Toyota retailer in the United States, tested DealerTrack for about a year. Sterling McCall finance director Bob Cannon said that the network lets the dealer “enter our applications to our lenders — Chase being the primary one — much faster than we normally would have.”

Callback time for approvals, which usually takes about an hour and a half, has been cut to five minutes with DealerTrack, Mr. Cannon said. “It virtually eliminates any delay in getting a call back from our lenders.”

In addition, “it allows us to go online and do business at any time,” he said. “The majority of automobiles are sold in the evenings or on Saturdays when your lenders are usually running skeleton crews.”

The availability of electronic contacts would be an important feature for any auto lending network, Mr. Cannon said.

“That advantage is going to definitely have its time and its place because it will allow us to electronically authenticate signatures,” he said. “Our business is very cash-flow-intensive; we require a lot of cash. Anything that improves our ability to access money on contacts faster — that makes our cash-flow situation that much better.”


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