Auto Dealer Software: Definitive Guide to Used Car Lot Mangement Software Shopping

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Modern used car dealership operation has become so complex that it would be unthinkable to do all the lot management tasks with pen and paper - unless you are selling 2-3 cars a month! With the help of automation software, you can run the used car lot operation more smoothly, and manage larger volume of cars with more profit.

Used car dealer software can be bought off the shelf, or it can be custom made by software developers. Major dealer software vendors are like Frazer, Cobalt, Reynolds and Reynolds, ADP, Dealerskins, DealerTrax and Gemini Systems. Custom made software is much more expensive but you get exactly what you want. Most of the independent car dealers can purchase the software with minimal configuration to do the job fairly well. This article gives you an idea of lot management software general features and serves as a software buying guide.

The auto dealer software shall have car inventory management capability. It keeps a list of the cars you have bought at wholesale auction market, or from trade-ins. Some sophisticated software packages link to vehicle information database, or built-in VIN decoder, and based on the VIN along, it can tell you a lot of information, like year, make, model, equipment options etc. about the vehicle. It also raises flags on those cars that have been declared total loss by insurance company if it is linked up to carfax.com or autocheck.com from Experian to generate vehicle history report and manufacturer recalls.

The software shall be able to take barcode scanner as VIN input without doing so manually. Ask if the barcode scanner is WiFi or Bluetooth wireless, or if the software can fetch the stored scanned VIN or part barcode from the device. Accurate VIN code entry is the first step to manage inventory effectively.

It shoule be able to print out window windshield stickers for each vehicles. As required by state law, each vehicle shall have "No Warranty As-IS" disclosure sheet on the vehicle if there is no warranty with the vehicle being sold. The buyer's guide window sticker shall be generated automatically with a simple click and print. It should also generate sales contract, or purchase order when the vehicle is sold. And if it is an installment sale, it should generate the installment payment contract and keeps track of the monthly or bi-weekly loan payments for the entire life of the loan.

Do a lot of testing with the new software package. Get a feel of how easy to do the administration work, and how easy to edit vehicle, to submit photos, and to stamp those vehicles as sold or as specially discounted. Ask about the capability to feature certain vehicles on the front page of the dealer website. For those vehicles that you want to have deep discount, or that you want to use as an incentive to draw more visitors, they should be displayed on the front page with special eye catching markings, icons. These should be built in to the package with a couple of clicks.

Multi media, pictures, videos, and Adobe Macromedia Flash handling capability. Test software package with different media type and size. Make sure the software can process large pictures gracefully without crashing. The pictures shall be properly compressed and resized that suit fast web displaying without degrading picture quality.

Stress test. Ask for a demo to handle hundreds of vehicles without slowing the system down to a crawl. Dealer software is a major investment. Make sure you get the right package the first time. When adding and deleting many vehicles, check to make sure the system still works as it should. Does the picture still show up properly, and does the system show any sign of "gum-up" or sluggishness? Batch editing, which is an advanced feature, will allow you to edit multiple vehicles in one shot. It is nice to have batch editing, or macro capability.

Inventory tracking should also cover what works have been done to each vehicle, what part used, and by whom. When you have a lot of vehicles, and you outsource car work to contractors, make sure you know who is in possession and what work has been done at any given time. That helps you keep track of contractor work performance. Ideally it also keep track of the itemized expense of these works.

The software shall report aged inventory that need to be moved to wholesale or mark down. The longer the vehicle stays on the lot, the more it cost to keep it in salable condition. And aged unprofitable vehicles take up space and capital which should be used for more profitable vehicles. Aged inventory carries a hefty opportunity costs. Software should let you set the policy of acceptable inventory ages and flag vehicles on time.

For Buy-Here-Pay-Here, or in house financing auto lot, one of the major activities is asset recovery, or repossession. Repo can be expensive and costly if not done right. Certain procedures have to be followed to be compliant with local laws, and notice shall be given timely and properly. Dealer software package shall track installment payment and report late payment timely so the repo action can be taken timely.

It should have interface to marketing and sale. At a least, how easy to navigate from the buyer's point of view? And how responsive is the website? Dealer software shall be able to manage photos and details of the vehicle. It shall publish to dealer website server database, and ideally it shall link to AutoTrader.com, eBay, Cars.com, craigslist.org etc., online marketplace websites, which can save you a lot of time posting those cars manually. Company like Digi-Go Publishing can send vehicles to hundreds of online marketplace websites. That means the software should be able to import and export vehicle inventory data to different websites in different format. Some software packages can print out a detail sheet for the customer to take it with them when they come to the lot and to pass around.

Software package shall also track the marketing performance of different advertising channels. It shall monitor website visitor and analyze how effective the dealer website is. It shall track website statistics, like page views, referrals, clicks, hits, and actions, like fill out loan application forms, leave a message on the web forms, etc. It shall track customer calls and follow-ups, and lot foot traffic to provide some business intelligence and insight into your lot operation. Lead management is critical. Hot lead shall be assigned and pursued timely. The software shall have managed purchased leads, or leads acquired through other means efficiently. More powerful software package can manage customers from first contact to closing. Those lot management software has full CRM (Customer Relationship Management) capability without you spending money on a separate software package for that purpose. CRM can make a huge impact on turning website visitor to paying customers, in other words, your bottom line.

Software shall provide interfaces to finance, accounting and tax. F&I, or Finance & Insurance is the profit center of a dealership and should be the major component of an effective dealer software package. Car dealer software shall have basic accounting capabilities, account payable, account receivable, asset and liability. If you set up a floor-plan or dealer financing, with a financing company, which can be a vehicle wholesale auction house, the software should keep track of that aspect of accounting too. Most states require the quarterly payment of vehicle inventory tax, and sales tax. The software handle that automatically. And for those buy-here-pay-here car lots, it shall also manages note installment payments. Software links to credit reporting agency to automatic report late payment, and to automatically pull credit report from TransUnion/Experian/Equifax for credit evaluation would be nice to have too.

Dealer software needs to interface with auto loan wholesale market, where you can get a bid on your loan from multiple, normally hundreds of, loan providers, like banks, and other financial institutions. The software shall have loan application submission built in. These car loan application is fairly standard with minor variation from state to state. You need to look at the application form and see if it has all the required information covered, usually, like applicant job history, residency, co-signer, monthly income, other sources of incomes. The forms should be submitted via a secure connection over the web encrypted. To combat terrorism, government compiles Office of Foreign Asset Control (OFAC) to make it available to financial institutions (which includes car dealerships) a list of "blocked persons" known as "Specialty Designed Nationals" (SDN). Non-compliance in this respect can result in hefty government fines. So you may want to check to make sure the software comes with this feature too. The software would be nice to have reporting of large cash transaction which is required by federal banking law to prevent money laundering.

Lot management software shall track the performance of each salesperson, and manage other costs associated with lot operation. It shall manage human resource and other aspects of business. Printing and reporting is also a must-have feature. The management shall have the profit/loss report with a couple of simple clicks at any given time to spot consumer trend, and to make strategic decision.

Dealer software packages can be installed on your local PC but some of them are hosted on high end remote application server accessible securely through any web browser, which eliminates the technical maintenance overhead. You will not have to worry about some virus on your computer wipes out your critical data, or causes costly delays. You will have to pay a monthly fee in this case. Make sure they have routine backups of your data. Ask about the cost of training, installation, upgrade, and support. It should be part of the whole package and be taken into consideration in the evaluation process.

Here is a list of state DOT or DMV links where you can find various state automotive wholesale or retail industry commissions, department of revenue (car dealer licensing falls under this department in most states), licensing boards, bureaus, and regulatory authorities. Check them out for auto dealer license application forms, licensing test and exam materials, bond and insurance requirement, car dealer law compliance, car salesperson licensing and registration (yes, some states require each employed salesmen to be licensed) and legal business practice. Keep this list handy if you sell cars to non-resident buyers over the internet, because some states have extra legal requirements to sell vehicles to their residents. Normally these same agencies govern the trade of mobile homes and RV's, trailers, motorcycles, boats and watercrafts, snowmobiles, moped, and other motorized vehicles and vessels related business activites like distributing, transporting, parts, repair, rebuilding, dismantling, recyling and salvage yard operation. Ideally the software should have features to facilitate the legal compliance and smart software should synchronize and update itself with latest legislature in automotive industry.