Dealership Software: Separating the Facts from the Fads

The automotive business is changing for both new car dealers and used car dealers alike. Margins are shrinking and there is an emphasis on increased efficiency, not just to maintain profits, but to survive. In recent years many firms have begun to market dealer software. But the real question for most business managers is: “How do you determine whether automotive dealer software will deliver on its promises?”

When looking at auto dealer software it's important to evaluate the biggest claim first: It will reduce costs. This is not just a function of the software but also of the automotive dealer personnel. Do they want to adopt car dealer software as much as management does? The better automobile dealer software solutions make it easier on your staff so that, beyond the initial resistance, uptake is quick. Here are some key questions to ask: Does the dealer software match with policies and procedures already in place? Will the software allow personnel to perform better with less effort? Does the software solve an existing problem that costs you time, money, or both?

Perhaps the second biggest claim made by dealer software vendors is that it will give management new information for decision making. Unfortunately, to a used car dealer or new car dealer evaluating dealer software for the first time, it's often difficult to tell what is useful information and what information they will be able to effectively integrate it into management practices. It is easiest to evaluate when you break down the quality of the information. One of the key benefits of modern automotive dealership software is the frequency of information. Instead of working with metrics calculated once a month, some software solutions increase that to daily. However, in this increasingly information-laden world, it is important to evaluate what information you actually need. The best software solutions accurately report only the information you need. Otherwise, too much information can actually be distracting for management and will reduce dealer management effectiveness.

Finally, one must evaluate the cost of the dealer software. Versus a completely manual solution, properly designed and implemented automotive dealer software should pay for itself within 6 months. It is important for any business to be honest, and realistic when evaluating how quickly the dealer software will pay for itself in their specific application. Many vendors will provide best-case scenarios in this regard and it's important to note that the best-case scenario will rarely exist in reality. With that said, the proper application of technology in the automotive business can yield spectacular financial and operational results when there is an excellent match of dealer software, implementation, and dealer culture ready to adopt a new solution.

Automobile dealer software is not only something most dealers will be asked to adopt, in coming years it will be a prerequisite for survival. They key in successful implementation is properly matching dealer software, expectations, and organization for an optimal outcome. Vendors will not always do this for you so it's important to know what to look for and what questions to ask of the vendor, dealership personnel, and management.