What Is a Dealer Management System?

The software a store runs its business on, why it is not a CRM, and which jobs belong on each side of the line.

A DMS is a collection of modules that together run a dealership as a business rather than as a sales floor. Inventory and stock numbers live there, so a unit gets a stock number, a cost, a reconditioning total and a floorplan record the day it is booked in. Deals are posted there once they are signed, which is the moment a sale becomes revenue and a commission becomes payable. Accounting, the general ledger, accounts payable and receivable, and the monthly financial statement the manufacturer wants all sit in the same system.

The fixed operations side is just as large. Service writes repair orders, tracks technician time and bills the customer or the warranty administrator. Parts keeps its own inventory, its own pricing and its own counter tickets. Payroll pays a floor that is mostly on commission, which is harder than it sounds. Title and registration work is prepared and tracked there, and so is the reporting a franchise store owes its manufacturer. All of that is why a DMS is the hardest system in the building to change, and why stores tend to keep one for a very long time.

The short version: a DMS knows what was sold, a CRM knows who nearly bought. A dealer management system is the system of record for the business after a deal is signed and for every department that keeps the doors open. A customer relationship management system is the system for the people before the deal exists, which means leads, conversations, appointments, follow up and the negotiation while it is still moving.

They touch at two places. Inventory flows toward the sales side, because a salesperson needs to know what is on the lot with photos and a price. The finished deal flows the other way, because a signed car has to be posted, financed, titled and paid. Everything else is separate by design, and a store that expects its DMS to work leads is going to be disappointed, in the same way a store that expects its CRM to produce a financial statement is asking the wrong question. The CRM side has its own entry in the automotive sales glossary.

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A worked example, illustrative figures only. A store buys a used sedan at auction for $17,200, puts $900 of reconditioning into it and books it in with a stock number. Those numbers create the unit's cost in the DMS. A salesperson sells it six weeks later at $21,400 with a trade allowance of $4,000 on a vehicle the used car manager values at $3,200.

When the paperwork is signed, the deal is posted. The DMS records the sale, the actual cash value of the trade, the front and back end gross, the reserve on the finance contract, the commission owed to the salesperson, the payoff sent to the customer's old lender, the funding expected from the new one, and the title work to be completed. The sedan leaves inventory, the trade enters it with its own stock number, and the month's financial statement updates. None of that is marketing, and none of it is follow up, which is exactly the point.

The first error is expecting it to sell cars. A DMS is an accounting and operations system with a customer list attached. The customer list is real and valuable, but it is a record of who bought, not a tool for working who has not. Equity mining, follow up processes, texting at volume and lead routing are sales floor jobs.

The second is underestimating what access to the data costs. Many stores discover that pulling their own records into another system carries a fee and a contract, which is a legitimate thing to ask about before signing anything. The third is treating a DMS change as a software decision. It is a business decision touching every department, and it is planned as one. A practical list of what to ask before choosing is on dealer management system requirements.

LeadLocate is the lead and customer side of the store, and it runs alongside the dealer management system rather than replacing it. Accounting, the general ledger, payroll, posted deals, floorplan, parts, repair orders, title and registration and manufacturer reporting stay in the DMS, where they belong. LeadLocate holds the leads, the conversations, the appointments, the follow up, the desking worksheets and the customer deal pages, and it reports on what produced the sale. An inventory feed and DMS access are not required to run it, which is why brokers and solo salespeople use it too, and Inventory Link can import a store's vehicles from its own website instead. When a finished credit application has to reach a dealer management system or a lender, SecureWebX exports it in the format the receiving system expects, described on lender and DMS export formats. A connection to a specific system is available on request, and our team puts it in production for your dealership. The rest of the platform is laid out on the LeadLocate platform.

What does DMS stand for at a car dealership?

Dealer management system. It is the software that runs the business side of a store: inventory, posted deals, accounting, parts, service, payroll and manufacturer reporting.

Is a CRM part of the dealer management system?

Some DMS vendors sell a CRM module, and plenty of stores run a separate one anyway. The two jobs are different: the DMS is the record of the business, the CRM is the tool for working customers.

Do you need a DMS to use LeadLocate?

No. An inventory feed and DMS access are not required. Inventory can be imported from the store's own website, or vehicles can be added by hand, which is how brokers and single salespeople run.

Can a dealer management system handle lead follow up?

A DMS holds the customers who already bought. Working leads takes routing, texting at volume, call recording and follow up processes, and those live on the sales floor side of the building.

A specialist shows the lead, texting, desking and deal tools on a live account, next to whatever system your store keeps its books in.

Prefer to talk right now? Call or text 844-376-2274.