Brian Benstock pushes the use of equity-mining software at Paragon Honda because each time it succeeds in getting a leased vehicle back early, nearly every department in the store benefits, especially finance and insurance.
Equity-mining software, sometimes called data-mining software, enables dealerships to spot current customers who are in a good position to get out of the vehicle they have and into a new one for about the same monthly payment.
The software looks at a number of factors to determine good prospects, including the amount of equity in their vehicle, interest rates, new factory incentives and residual values.
Those prospects are then prominently flagged for sales staff so customers can be called, sent an offer or tagged in the service lane when they come in for maintenance or repairs.
In an unscientific online survey by Automotive News, 59 percent of dealership respondents said their store uses equity-mining software, and 47 percent rated the results as "good" or "very good."
Benstock, general manager of Paragon Honda, said that at his store, the software is a gold mine for finding lease customers.
Those customers are going to need a different car in a few months at most, Benstock said. So if they can be brought in early, sometimes before they've even begun shopping, that sets off a chain reaction of revenue for nearly every department of the store, he said.
The first profit opportunity is the sale or lease of a new car. Second, the early trade-in vehicle almost surely will qualify for certified pre-owned status, making it a valuable product. The vehicle will have to be prepared for resale and possibly have parts replaced, feeding service and parts.