F&I financing has brought a paradigm shift to the auto retail industry, giving more car buyers the chance to protect their investments and creating new income opportunities for finance managers, dealers, and agents. Agent Entrepreneur met with Justin Lane, founder and CEO of Line\5, to ask how his system works, what inspired its invention, and why it’s hard to relax in a fast-paced industry.
Justin, for agents who aren’t familiar, what does your company do?
Line\5 is the best tool available for finance managers to get those additional sales they wouldn’t otherwise get. If they’re capped by the original bank, have a cash deal, when a customer comes into the service department — you can still finance all F&I products. Line\5 is for every scenario where a product can’t be included in a car deal.
Are you only in auto dealerships?
No, we’re also in RV, marine, and motorsports dealerships. It’s amazing how well RV is doing. The warranty on an RV could be a $10,000 or $15,000 product and cancelations are next to nothing.
How long has the company been around?
January 2014 is when we officially went live. In that first year before launch, we spent six months just doing licensing and software development work. We hired a software development team, which is still in-house. We never stop improving the system and adding features.
Did you test it at dealerships?
My partners and I have years of dealership and management experience. All of us are lifers in the automotive industry. We went through the features we wanted to launch with and asked friends in dealerships to give us feedback.
Did their input alter your course?
Sometimes. Nobody said, “You need to change this system.” But they did suggest adding new tools and features that helped us improve the software. That input helped make the system bigger, better, and quicker.
What are you hearing from the field now?
One thing we tend to hear from dealers is that volumes are higher because our payments are so low. We finance every product they currently sell. Most of our deals have multiple products, a longer term, and that makes the finance manager feel more confident and sell more products to more customers.
"After moving to sales and finance, it became very clear that opportunities were being missed daily due to financing caps."
Every customer is automatically approved. The finance manager is never put in a situation where they enter a deal for nothing. We have eliminated the question of whether they are going to be approved or which products will qualify.
What sparked the inspiration for Line\5?
Having worked in various management positions and departments, I saw that the best opportunity for growth is in the finance department. I spent many years developing packages for parts and services departments. After moving to sales and finance, it became very clear that opportunities were being missed daily due to financing caps.
How did you find software developers?
Originally, we worked with a local development company. Once we realized we needed an in-house team, we started recruiting all over the country. Right now, we have a team of seven developers. Every time a dealer has a question, an issue or something they’d like to customize, we can handle it in matter of hours or days.
How customized does it get?
We fine-tune the system as requested. We find out what products a dealer wants to offer, what price they want to sell the products for, how they want to structure the down payment — which we don’t require — and how to pay out to the dealer. The system allows each dealership to have many options.
How do you sell it and what does the install look like?
It’s sold through agents. When we onboard a dealer, the agent who signs them up sends us a checklist of documents. We take it from there. We train the finance managers on how to use the system. We organize the products through PEN or F&I Express. We set up the esignature. It only takes a day or two and the dealer is up and going.
Did you have the PEN and F&I Express partnerships out of the gate?
No, that came along about a year and a half ago. Not only has it made it easier for dealers to do business with us, it makes the signup process a lot easier. We just need their dealer code and they’re ready to go.
Is there a training component?
For finance managers who want training, we’ll train them. We have a training department in-house and it’s all done through WebEx. If they want us to send somebody onsite, we’ll do it. Most dealers understand how to do training remotely. That initial training session only takes 30 minutes, then we have in-house dealer support for the long term and a full video training library.
How do you handle collections?
We have our own in-house collections department. Their job is to keep that customer’s loan current and keep those products active for the full term. We don’t want cancelations. Some competitors offer zero percent, but they want cancelations so they can cycle the money and make another fee. We want to keep cancelations as low as possible to maintain that dealer relationship forever.
What has changed since launch?
Since our launch, we’ve increased our available features tenfold. We’re doing most of the heavy lifting for the finance manager —products are integrated and automatically rated — they get erating and econtracting through us. Loans are funded as soon as the documents are received by our system and money goes to the dealer the next day. Dealers and agents have full access to an interactive dashboard to monitor their progress, view training videos, request cancelations and view many customized reports.
Did you test with or get feedback from agents?
Some of the agents we talked to had a lot of very good insights about how to make the system easier to use. We support the agents better than anyone in our industry. Once an agent signs up, we give them all the materials they need to offer Line\5 to dealers. Once an agent signs a dealer with Line\5, it’s their dealer forever.
What does the agent earn?
Our agent’s commission plus bonus plan is the most aggressive in the industry. There is a commission paid on every deal and it’s truly no-chargeback. We have some agents making over $15,000 monthly just from Line\5. That’s not including the commissions on the added product sales.
Did you ever sell directly to dealers?
We advertise to the whole market to build brand awareness, so they call. If a dealership calls directly, we’re going to sign them up. If there is an agent in their area, we’ll refer them to that agent.
What are you working on right now?
We are working on an amazing program for independent dealers that is going to launch in the next couple months. We are always building new features and tools for agents and dealers. An agent portal is in the works that will help agents sign up dealers even more quickly and easily, view their individual progress and monitor their commissions — right in the Line\5 system.
Has it been challenging evolving from a startup to an established business? Has it changed your outlook as an executive?
It can be challenging at times. Every business goes through hurdles to reach their goals. I don’t think our beginnings were different in that respect. I like taking an idea and building it. It’s very rewarding to see an idea through a launch and onto continued success. I don’t think my outlook has changed drastically but I have become more patient and more hyperfocused.
Whom do you rely on to keep the business running smoothly?
Our managers, our customer service team, our development team and our sales team. They keep agents and dealers happy and make sure customers are happy with us. They’re all providing a great dealer, agent, and customer experience.
What do you do when you’re not working?
I like to spend time with family and friends, golf, boat, and travel when possible. I’m a big football fan. I am obsessed with all things car related. I live in Naples, Fla., and there are always outdoor activities. But I’m always thinking about the business. I’ll start to relax, then think of all our new ideas and things we need to accomplish.