RouteOne LLC started the national rollout of its online credit application management system Nov. 3. The rollout began with Southeastern dealerships that use Ford Credit and General Motors Acceptance Corp.

With RouteOne, dealers use just one system to reach captives, banks, and credit unions, instead of using different systems.

“The problem with the captive systems as they stand today is they allow a two-way street between the dealer and the captive finance company – but they don’t allow the dealer to conduct business electronically with other finance sources,” said Mike Jurecki, president and CEO of RouteOne. “So the process is not that efficient.”

According to Jurecki, what RouteOne is trying to accomplish is to give the dealer the best of both worlds. “We want to provide a system that allows the dealer to conduct business electronically with all their finance sources on one system – banks, captives, credit unions, and finance companies,” Jurecki told F&I Management and Technology. “But not to put dealers in a position where they have to give up the proprietary functionality that they’ve had available to them through their proprietary systems with the captive finance companies.

“So what we’re going to do is combine both the proprietary systems with the aggregation model,” Jurecki said. “We call that a credit application management system. It’s not really just a credit aggregation system; it’s not just a proprietary system. It combines them both.”

But that’s not all. The system also does reporting, according to Jurecki. “The third thing it does – and a reason we call it a management system – is it adds some aggregated reporting, and that’s pretty important when you’re running your dealership,” he said.

So what makes RouteOne different?

“For dealerships, it means a single point of credit application entry,” Jurecki said. “It means faster processing time. If you can enter in all your applications on one system, you can save a lot of time.

“We feel like by designing a system that is open to all finance sources, and all those finance sources know the captives are also on that system, it’s a pretty compelling reason to join that system,” Jurecki said. “That’s what we’re doing. So we feel there’s a high probability that we will get, on this system, all the finance sources the dealer uses. And of course that will put the F&I manager, F&I director, in the best possible position in terms of efficiency to do their job.”

If you’re an F&I director, you’re dealing with lots of finance sources. And of course you have a number of these finance sources coming to you and to your F&I manager, telling you that they’re the best, along with all the great things that they’re doing for you.

“But it’s really hard to measure that objectively,” Jurecki said. The reporting function of RouteOne can do exactly that, though, according to Jurecki. “It will help dealers better manage their business,” he said.

“We now have a way to measure the approvals and the conditions of the various lenders,” Jurecki said. “You’re going to be able to say to them, ‘You don’t buy as deep as you tell me you do.’” And the reports will even include the response times of various lenders, according to Jurecki.

“Over time, we’ll build to improve that reporting capability, based on feedback from our dealers,” Jurecki told F&I. “As we learn and grow, our system will be in a better position, with that feedback, to respond to dealer needs.”

The value of reporting tool is just going to grow over time, according to Jurecki. “We’re trying to retain all of the value that the dealers enjoy today with their proprietary systems. With their systems, and they are all different, there could be database links in there, there could be CRM tools, there could be lease term information, there could be payoff information, there could be wholesale information, there could be program information that they’re running at the local branch office. The bottom line is it will have a way to maintain those links. And it will have the potential to build upon them as well,” he said.

Faster Credit Approval

For the customer, RouteOne means faster credit approval and less time in the dealership, according to Jurecki. “The F&I manager is going to be much more efficient,” he said. “We know from a recent J.D. Power survey that when a customer spends more than an hour waiting between the sales office and the F&I office, the sales satisfaction drops substantially,” he said.

Jurecki believes faster closing times also result in greater closing ratios for dealers – and more profit. “Not to mention a higher quality of life for the F&I manager!” he added with a laugh.

For the finance sources, RouteOne means the optimum terms of access, according to Jurecki. “Our goal is for the system to be in every Toyota, every GM, every Ford, every Chrysler dealership across the country. That’s a heck of a lot of access,” Jurecki said. “So if you’re a finance source, you want to be on that system – and it saves you a lot of time, money and effort trying to find out what system you want to be on to cover all your bases.”

Jurecki said there are efficiencies to be gained for multi-point stores, “especially if you’re moving F&I managers from one store to the next, because everything that should be the same will be the same, in terms of how the application is set up and how it works. So the training effort will be dramatically decreased with this system, especially for the major dealers who have multiple franchises.”

Jurecki said RouteOne already has commitments from 22 indirect auto finance sources, “and we’re negotiating with more than a dozen others. Right now I think we’re booked through May of next year as far as integrating the ones we already have commitments from. Over time, we expect this to grow quite a bit.”

‘Focused on Dealer Needs’

According to Jurecki, RouteOne is focused on dealer needs. “RouteOne was really founded at the request of the dealers,” he told F&I. “It didn’t really happen as one captive vs. another. For years now, dealers have been saying to all of the captives, ‘You guys have great proprietary systems, but they could be a lot better if I could conduct business with all my finance sources, including you, Mr. Captive, on one system.’ And really that’s the genesis of RouteOne. That’s how we came about.

“We basically have a board of 10 dealers representing 17 different rooftops across the country,” Jurecki said. “We have received a significant amount of input from these dealers, and have acted upon it over the course of a year. They have been an integral part of the design process of this system.”

“During our development we wanted to make sure that we were building something that the ultimate customer would find valuable,” said Kelly Mankin, COO of RouteOne. “We took our Release 1 product to various F&I managers and finance directors in four major cities around the country,” Mankin told F&I.

“We did it in a multitude of stores representing single franchises and multi-point franchises. We basically set them down and said, ‘Tell us what you think.’ They made us aware of some issues, and we worked to resolve those. By and large, they validated the business model. They said “If you can provide a system that gives me the ability to enter in applications to all my major finance sources and put those applications through a deal manager and give me this reporting on top of that? Wow, you’ve really got something here!’ We have what we like to say is a one-stop shop,” Mankin said.

Dealer Reception is Critical

According to Jurecki, RouteOne really doesn’t have any hard targets of how many dealers it needs to sign up to be successful. “What we feel we need is for the product to be well received by dealers, and for the value of that product to exceed that of their current captive system,” Jurecki said.

And this highlights a key goal of RouteOne: to ultimately replace the captives’ proprietary systems in dealerships. “We believe strongly that they’ll deploy this system and it will take the place of the captives’ current proprietary systems,” Jurecki told F&I. “That’s really where we’re trying to go with it.

“The system’s value will be based on two things; number one, the quality of the product that we offer; and number two, the amount of finance sources that are on the system serving dealers in the areas where we roll the product out,” Jurecki said. “So it’s a combination of finance sources and functionality that provide value to the dealers.”

Training Forces Being Deployed

“ We are going to be deploying field forces from the four captive finance companies to sign up their dealers,” Jurecki told F&I. “So really, we’re positioning this as a captive system. And it’s going to be the replacement model, we certainly hope, for their current systems.”

According to Jurecki, additional features will be added over the next eight to 12 months. “Beyond that, I don’t think we’ll ever stop adding features, but certainly the majority of those will be rolled out in the next eight to 12 months,” he said. “Our goal is to have a new release approximately every 120 days.

“We are going to be looking at putting together an e-contracting solution which we see as essential to having a comprehensive solution in the credit management world,” Jurecki said. “We are going to rely on our dealers, to a large extent, to help prioritize functionality releases. With the second release, we’re holding back 20 percent of planned functionality just to cover suggestions from dealers. We’ll probably follow that same plan and process with each release as we go forward.”

'Speed, Access and Simplicity'

“You are going to be hearing the words speed, access and simplicity from us over the next few months,” Jurecki said.

“For the dealer, we offer a single point of credit application entry, faster processing time, and better comprehensive reporting to allow them to manage their business more efficiently and more objectively.

“For the customer, we offer speed: Less time in the dealership and more time driving that new car.

“For the finance sources, it is the ultimate access,” Jurecki said. “With the dealer’s permission, there will be certain reports that they have access to that will allow them to see how they are doing compared to other finance sources as well. So they’ll be able to have a better idea of what their standing is from the dealer’s perspective.”

“Our system is going to be a dealer choice model,” Jurecki told F&I. “Our strategy is really more of a pull strategy vs. a push strategy. If the dealers want it and say it offers more value to them than something else in the dealership, we’re going to provide it for them. I’m not really sure what the market is going to look like a few years down the road, but we certainly feel that we are going to be a very large portion of dealerships with RouteOne.”

Alliance Formed in 2002

Ford Credit, GMAC and DaimlerChrysler Services formed RouteOne in January 2002. Toyota Financial Services joined the Big 3 captive finance companies as a partner in June 2002.

Ford, GM and DaimlerChrysler each own 30 percent of RouteOne, with Toyota holding the remaining 10 percent. Nissan Acceptance is a non-equity user of the system.

Plans call for DaimlerChrysler Services and Toyota Financial to join the system online late in the first quarter of 2004.

Dealers will not pay to use the system; RouteOne will sell its services to financial institutions.

Twenty-two captives and banks have said they will use the RouteOne system. Dealers can access the system through the RouteOne Web site or through a link on their captive finance company's Web site.

RouteOne will be integrated with dealer management systems from the leading vendors by spring 2004, Jurecki said.

For more information, visit www.routeone.com.