Special Finance Desking Software: To Automate Or Not-To-Automate, That Is The Question!

August 2006, Auto Dealer Today - WebXclusive

by Greg Goebel - Also by this author

In today’s automobile dealership, technology impacts almost every aspect of the business. Dealers have the option to track their customers from the initial dealership contact all the way through the business cycle, including their service visits and follow-up calls. They are able to use technology to submit deals through various conduits to virtually every finance company on the planet. They are even able to contract the deals through e-contracting, eliminating the need for preprinted forms that must be programmed to work with the dealerships printing hardware.
One area of technology often seems to be in the forefront of controversy is desking software. I am continually besieged by dealers or Special Finance managers wanting to know my opinion on which company’s software I prefer, always certain that whatever software that I “bless” will provide the key to success to their departments – that proverbial “silver bullet” if you will.

First things first; there are no silver bullets. Not for special finance, nor any other department in the dealership. Simply installing some sophisticated software will not, by itself, cause a single vehicle to cross the curb, nor put one more dollar of gross profit on your ledger.

Technology doesn’t greet and qualify customers. It doesn’t show vehicles, and it doesn’t negotiate deals. Don’t let my comments lead you to believe that I don’t recommend special finance software. In many circumstances, indeed I do.

I feel that many factors must be considered long before you sort through the many excellent software solutions. First, you must determine what your expectations are of the addition of software. Generally it is to provide guidance in determining which finance companies’ programs will best match with a customer, then provide a quick analysis of the inventory allowing you to select the vehicle with the most gross profit potential to match the recommended financing programs. Other popular solutions the various softwares provide are customer and lead tracking, deal tracking and of course deal submission.

Two other factors that come into play are the size of your inventory and the number of locations sharing that inventory. Generally a dealership operating with 100 units or more in inventory will benefit significantly from the addition of software. It is essential that a special finance manager is able to quickly determine which vehicles offer the greatest spread between the book value and cost, within a certain price range. When you cross the 100 unit threshold software is often the only way that you can accomplish that task quickly and accurately.

Similarly, when sharing inventory between multiple locations, desking software can be especially beneficial. Even if two locations are simply located across the street from each other it is amazing how easily a vehicle can become “lost”. Software can insure that all units that match customer’s needs are always considered when desking a deal, regardless of where they may be currently residing.

Before I go any further, let me remind you that technology in the special finance department is no different than the technology found in the service departments. Having personally written checks for technology in both areas of the operation, I can assure you that the $20,000+ diagnostic tools in the service departments are nothing more than expensive tool holders if the technicians have not been trained and are well versed in using them.

The sophistication level for the technology available for the SF department can be mind boggling. Regardless of the provider, the software can offer more versatility and options than you can imagine. Unfortunately, that is where the problems begin.

The marketing offered by most providers entices dealers by promising increased sales and increased deal gross profits by allowing the user to better qualify the customer prior to vehicle selection. In addition, it allows the user to more easily identify which finance company will most likely approve the deal – then helping the special finance manager structure a deal with the appropriate terms in order to maximize gross profits for that particular finance company.

These are all very realistic promises IF the user has been satisfactorily trained and is comfortable with the many functions the software offers. That little two letter word – “if” – unfortunately is all too often a very big obstacle, one that often means less than 25 percent of the functionality of the systems are utilized by well over 50 percent of the users.

Please don’t read this to mean that the support and training offered by the many providers is lacking. Indeed it is just the opposite. The problem is that in the real world one of three situations seems to inevitably occur which derails the results expected by the addition of software – none the fault of the provider.

All too often in our industry, turnover in the department occurs. The individual that was provided the training and instruction moves up or on, and a new person is put into the seat. The dealership immediately goes back to square one and somehow there is always something more important than taking the time to invest in training.

Another pitfall is that the manager that the software is designed to help doesn’t embrace technology. In short, the manager is not computer savvy and struggles with basic computer operation. This is a frequent occurrence, and while they may be willing to cooperate, in the end, they generally default back to what they are comfortable and familiar with – a calculator and a book-out sheet.

Alternatively, the addition of software may backfire for just the opposite reason. A “computer nerd” can become so obsessed by the features and functions that they lose sight of the fact that they still have to be able to desk deals and sell cars.

Finally I go back to the word “guidance”. These programs offer guidance the same way that the Black Book, Kelly Blue Book, NADA and other inventory appraisal books offer guidance. An individual still must be able to interpret the guides. Guides are no substitution for sound deductive reasoning, intuitive thinking and experience. The software may indicate that given the customer’s credit entered, a particular finance company is the best choice. However, through experience and deductive reasoning a good SF manager will know that a different company is the better option.

So we come back to the initial question – should you automate, and if so, which software? If you have defined your expectations and are willing to commit to ongoing training for all individuals that will use the software, I offer, “Yes!” As to which one, I believe simpler is better. Identify the simplest solution that will accomplish your desired result. Check out references from dealers of similar size and department scopes. Remember that just because a dealer selling 25 special finance deals per month endorses particular software, it doesn’t mean the software is the best solution for a store selling 200 special finance deals between two different locations, and vice-versa.

In the end, special finance desking software is another of many tools available to any dealership. Like most other tools the end user will be responsible for determining whether its acquisition was warranted or not. Just as in your service department, if the end user is a competent and quality individual that embraces technology, it will improve both their efficiency and gross profits.

Vol 1, Issue 12

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