November 2009 - Feature
Credit Platforms Revisited
By Gregory Arroyo
F&I: Marty, ODE is relatively new to the credit platform arena. What are you bringing that’s new, and will there be an additional charge for ODE integration if a dealer is already paying for DealerTrack and
RouteOne integration?
 |
MZ: Open Dealer Exchange provides a direct connection from the dealer management system to the lender’s origination system, thus eliminating the need for a dealer to integrate into a third-party portal. This is a very similar concept to what economists call “disintermediation.” For dealers, that means the elimination of third-party DMS integration, as well as the cost and complexity that comes with it.
|
So, from a dealer’s perspective, we have eliminated both integration cost and the extra steps required to work with a third-party platform. In today’s tough economic times, that’s a cost savings every dealer can appreciate. From a lender’s perspective, we connect the credit system directly to the dealer’s DMS. In other words, lenders don’t need to rely on third-party integration. This is the fundamental difference between ODE and other platform providers, as ODE is custom software built specifically to run with your DMS. Most dealers already have a credit application residing on their DMS systems, so there’s no additional cost. We are also bringing the strength of our owner’s relationship with several captive finance companies, including Volkswagen and Mercedes, to the mix.
F&I: Justin, what are some key factors dealers should consider when selecting a credit application platform?
JO: Ultimately, dealers require a system that will provide maximum value through compliant and complete access to credit application processing with their captive and non-captive finance sources.
In our experience, this value is provided through delivering a single system that enables access to financing across the entire credit spectrum from captive and non-captive finance sources. It should also provide compliance tools that allow a dealer to execute credit processes for all customers. It’s also about open integration. Most important, it should provide management tools, such as contracts-in-transit and F&I reporting, that allow a dealer to obtain a full view of their complete book of business.
F&I: Let’s go back to the lending side of things. Robert, with credit unions taking a greater share of auto loans, how do you envision dealers working with all lenders in the future, and what will their mix be moving forward?
RG: The dynamics of the market have been quite volatile. Some lenders pulled out of the auto finance market, some retrenched and reduced their footprint, and others saw their ability to originate loans severely hampered due to capital constraints. The data shows us that credit unions stepped up and provided some relief to the dealer community, increasing their market share and filling some of the void. As the perception of credit unions as a reliable source of financing has grown, they have become a more important part of the lender mix for many dealers.