FARMINGTON HILLS, Mich. — “Eventually is really not acceptable in today’s operating world” was how CEO Justin Oesterle described RouteOne’s decision to acquire F&I solution maker MaximTrak Technologies — a deal which became effective today for an undisclosed price.
“The alternative to the relationship we have aptly arrived at with MaximTrak was to continue to build out organically. Speed to market, however, is a critical element, and we see a wave of pretty important and historic change coming through the industry,” said Oesterle. “And we believe that having the right solution to allow dealerships to have the processes that customers want is a really critical thing today.
“And it’s necessary to have it now, and we just didn’t think eventually was good enough,” he added.
The acquisition, which brings together a firm that’s pursued advancements in finance technology with a company that has done the same on the insurance side of the F&I business, represents Oesterle’s first major move since being named RouteOne’s CEO this past June. The deal was executed through a wholly owned subsidiary created by RouteOne. It will operate as MaximTrak Technologies out of the F&I tech firm’s Wayne, Pa., offices and under the leadership of both Oesterle and Jim Maxim Jr., president of MaximTrak.
“Frankly, when we start talking about the pace of technology, the pace of change today, more is happening faster than ever before, and that’s why you’re seeing a lot of this consolidation in the marketplace,” said Maxim. “And when you look at going at it alone versus going at it with a strong partner, the similarities between our companies were very stark when you start talking about our client base being OEM focused, strategic partnerships, great direct dealer support, passion for the business, and really being at the heart of the F&I space.
“A lot of our competition is a mile wide and an inch deep, where I’d like to think of MaximTrak and RouteOne as going as deep as you can go in this specific area of the vehicle transaction process,” he added. “And we want to take these great learnings, the technology, and propel it earlier upstream and give our partners a great platform to sell cars on. And that’s what we’re doing.”
RouteOne was founded in 2002 by Chrysler Financial (now TD Auto Finance), Ford Motor Credit Co., General Motors Acceptance Corp. (now Ally), and Toyota Financial Services, while MaximTrak was founded in 2003 by the Maxim family. Combined, the two companies serve more than 1,400 finance sources, 18,000-plus dealers, more than 130 dealer service providers, 80-plus F&I product providers, and more than 10 OEMs in the United States, Canada, Puerto Rico, and Mexico. They also employ approximately 400 individuals in Michigan, Pennsylvania, and Canada, as well as local staff in major markets.
According to officials, product integration between the two companies began prior to the acquisition and will be “further developed and strengthened on an expedited basis.” Oesterle said some of that integration will be displayed at next month’s National Automobile Dealers Association (NADA) Convention and Expo.
The new subsidiary joins a growing list of companies targeting the online-to-in-store transition, Oesterle noting that, based on current customer expectations, “the process elements of selling a car, getting the car financed and selecting the protections for that vehicle are not completely discrete anymore.”
“So the tools that we offer need to be comprehensive in that very narrow niche,” he added. “That is absolutely the strategy, having tools to support all ‘F’ and ‘I’ in-store, online, in the showroom — all the different points of sale.”
Oesterle, however, stopped short of describing RouteOne’s new subsidiary as a competitor to Cox Automotive’s MakeMyDeal or Pearl Technologies’ ShowroomXpress. “I won’t comment too much on what others’ strategies are,” he said. “I would say there’s a degree to which RouteOne can be a partner to companies, and we think, from an integration perspective to our core platform to some of the new tools that the Maxim team and RouteOne are going to be putting together, the elements we can provide can really be an accelerant for a lot of providers at the OEM level, at the dealer level, and in the way dealerships and OEMs engage with third parties to support them.”
The new subsidiary will also have a vocal proponent and pusher of the digital F&I movement on its senior management team in Maxim Jr., who has served on multiple panels addressing the tablet F&I menu at F&I and Showroom’s annual conference. At the 2013 event, he called mobile technology a “game-changer” because such technologies “drive better interactions with consumers, better presentations, a more efficient process; it’s all designed to enhance the profitability but also the customer experience.”
“People in the audience were freaking out about pushing technology on iPads,” he recalled. “When we think about what we’re talking about today, it’s kind of comical, as it is obvious now in hindsight that the pace is only picking up, And it’s not going to take years for these things to come to fruition. We’re talking the next year, two years. This is a finite window, and it’s amazing to watch.”
He admitted, however, that continuing that push will be different under the RouteOne umbrella. “But it’s a good different, because, at the end of the day, whether you’re working for yourself or with others, it comes down to the people you’re working with,” he said. “So the RouteOne people, the leadership team there, are really first-class individuals, and that’s really the reason why we did this deal with them. We feel comfortable, and we couldn’t be more enthusiastic with how they engaged us through this transaction.
“We have a long decade-plus history together,” he added,” so it feels natural in a lot of ways.”