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Match Play

May 2010, F&I and Showroom - Feature

by Gregory Arroyo - Also by this author

Founded in 2002 by the financing arms of DaimlerChrysler, Ford, General Motors and Toyota, RouteOne isn’t taking recent moves by its competitors lightly. In fact, as they continue to move into its space, the technology provider is quietly impeding on theirs. This month, Mike Jurecki, president and CEO of RouteOne, discusses the company’s recent moves to expand its footprint in the Internet sales and used-vehicle space, actions he says are driven by market dynamics and not the need to match the play of its biggest competitors.

F&I: Is it me, or are things really heating up in the credit-platform arena?

Jurecki: Well, it’s never really cooled down. There’s always been a lot going on. We still continue to sign up lenders at a pretty rapid pace. Today, we have more than 400 lenders on our platform. Obviously, Open Dealer Exchange has entered the marketplace, and DealerTrack’s not sitting still. So, from our vantage point, it’s always been fairly competitive, and I don’t see that changing anytime soon.

F&I: What are your thoughts on DealerTrack paying $15 million to get GMAC on its credit platform?

Jurecki: Well, you certainly can’t blame DealerTrack for pursuing our owners. They’re all big accounts, and if I were them, I’d be doing the same thing. As for writing a $15 million check, well, that’s a pretty large amount of money. Commenting beyond that wouldn’t really be appropriate for RouteOne.

As for us, we’re coming off a record month in March and we’re going to continue to focus on growing our share of the business. Last year alone we grew our market share by 12 percentage points in the non-captive space, and we’re going to do everything we can to keep that number positive.

F&I: GMAC’s Tim Russi said one reason the company made itself available on DealerTrack was because it’s focused on the used-vehicle market. Do you expect that segment to play a big role this year?

Jurecki: Coming out of the recession, I think we’ll see the used-car market improve before the new-car market does. But I think things are going to level off at some point. Our footprint in the used-car market has historically been limited to stores associated with franchised dealerships. However, I think it’s important to note that approximately 50 percent of our applications are for used cars. Obviously, we have a number of finance sources that focus on that space, as well as the nearprime and subprime segments.

F&I: You recently increased the number of nonprime and subprime finance sources on your platform with the addition of Nationwide Acceptance and Regional Acceptance. Were those announcements about matching the dynamics of the marketplace or the play of your competitors?

Jurecki: I wouldn’t say it was an effort to match them, as we’ve always aggressively pursued a full array of lenders. We’ve had AmeriCredit on for quite some time, as well as Capital One, Citi, Drive Financial, Wells Fargo, US Bank Special, Westlake, Condor, and Chase Custom.

As I said, we have played in the non-franchised space as well. However, I will tell you that we do see some opportunity to move more aggressively in that space than we have in the past. We definitely think we have the right set of lenders and the right service model to do that. And don’t forget, we have three platforms servicing that space that we supply the plumbing for: Finance Express, AppOne and NOWCOM. Historically, that’s how we’ve gone to market in that space, but we’re also considering a bigger footprint there as an individual player.

F&I: Was that the reason behind your recent agreement with the Pre-Owned Automobile Dealers Alliance (POADA)?

Jurecki: Yes. We just felt it made sense to be with POADA if we were going to go after independent dealers. So, that is an important part of our go-to-market approach.

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