Walser to market finance platform to retailers

Walser Automotive Group will soon offer its proprietary finance management platform, called Fuse, to the market.

The tool will allow dealerships to construct car deals that provide customers the lowest payment with the highest dealer reserve — the amount a dealership is compensated for arranging a deal with an auto lender.

The business line will premiere this spring as a joint venture with Israeli venture capital firm PICO Venture Partners. The launch is part of a growing trend of dealership groups investing in the development of dealership software and then bringing those tools to market.

Andrew Walser, CEO of the Minnesota-based group, said the company's journey to the software space began after it eliminated the F&I department. The group formed an internal software development team and deployed Fuse companywide in 2012. The tool came amid a transition to one-price, one-person vehicle sales aimed at reducing the time it took to finalize a vehicle sale at Walser stores.

The platform, now in its fifth iteration, distinguishes itself in a market swarming with software because of its origins as an in-store tool, Walser said.

"It was built from the dealership out, not the Internet in," Walser told Automotive News. "We're living in the same software — the customer, the employees and the management team — whether it's online or in store."

The platform builds deals using information about the customer and the vehicle and accessories they plan to purchase. From there, the software sifts through the auto lenders connected through the platform to determine the lowest monthly payment for the customer that delivers the highest dealer reserve.

The tool allows dealership employees to be more objective about which banks purchase business from the store, Walser said, rather than relying on relationships within the lenders.

"There's cases where you can make a couple hundred dollars more at one bank and provide the exact same payment to a consumer, just the way that they pay reserve," he said. "And what if the dealer wasn't even signed up with that bank? Well, it just cost the dealership $200."

Fuse, which stands for "finance under secure environment," also provides the underpinnings of Walser's digital retailing platform. The Fuse dealership desking tool is live now on group store websites, and the ability to finalize the deal online without dealership employee intervention will roll out in the next several months, Walser said.

The group averages $1,250 in F&I profit per vehicle sold, up $500 from when the stores had F&I departments. Walser attributes the change to time saved in the dealership and the added profitability from using the tool to select the lender best suited for the store. Allowing customers to self-select F&I options online also has been beneficial, he said.

To date, the group has finalized nearly 375,000 transactions through Fuse in its dealerships. The group retailed 42,181 vehicles last year, new and used.

Walser Automotive Group is based in Edina and has 28 stores selling brands including Toyota, Chevrolet, Cadillac and Subaru in Minnesota, California, Illinois and Wichita, Kan. The group's chairman and Andrew's brother, Paul Walser, became chairman of the National Automobile Dealers Association last week.

The group, which also has one standalone used-car store, ranks No. 54 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 18,057 new vehicles in 2019.

Walser said the tool, which will be available to other dealerships starting April 1, will start with month-to-month contracts. The decision to sell the finance platform came from other stores asking to use the technology, he said.

Walser flew to Israel in 2018 to learn more about the startup scene and by chance met Elie Wurtman, managing partner of PICO Venture Partners and the investor and founder of Vroom. Wurtman was interested in the technology and called Walser the following year to suggest working together to deploy the software platform on the market. Wurtman was keen on investing in software that dealers liked, given that the majority of vehicle sales take place inside dealerships and will continue to do so.

"But that doesn't mean that there isn't room to improve certain processes inside dealerships, and make them much more intelligent, much more efficient and much more digital," Walser said.

The two struck a deal last summer. The company was incorporated Aug. 31, with Wurtman putting down $5 million for the project.

For Walser, the Fuse platform is likely to benefit various dealership employment models, not just one-price stores without F&I managers.

"Why couldn't this tool be used by F&I managers to weaponize their ability to find better payments for their customers very quickly," Walser said, "and better deals for the dealership?"