Market Scan Information Systems Year Founded: 1988 Core Business: Software for auto dealers to calculate customer lease rates Revenues in 1995: $2 million Revenues in 1998: $30 million Employees in 1995: 12 Employees in 1998: 160 Top Executives: Russell West, President; Rusty West, Executive Vice President Goal: To provide the most comprehensive lease rate information Driving Force: Need for competitive lease rates by dealers By JENNIFER NETHERBY Staff Reporter When Russell West was an Atlanta car dealer, it took him up to 10 minutes to calculate a lease rate for each buyer. Finding comparative rates from other lenders took even longer. And then there was the time it took to redo the calculation if a customer decided he didn’t want a sunroof, or if he preferred a 24-month lease to a 36-month lease. “I had a calculator on my desk, a legal pad and three-ring binder full of information,” West recalled. It was nearly impossible to find the best possible rate for a customer because of the excessive amount of time involved, he says. Then, in the late 1980s, West and his son Rusty came up with an idea to compile a database of lenders that would allow dealers to simply type in information about the customer and the vehicle and receive the cheapest financing rate in a matter of seconds. Market Scan Information Systems was born. A decade after its shoestring start, Market Scan dominates the car-lease software market with its Lease Prophet program. The Westlake Village-based company’s sales have jumped from $2 million in 1995 to nearly $30 million in 1998. Chris Denove, director of consulting for J.D. Power and Associates, said programs like Market Scan’s eliminate the hassles dealers routinely face in locating the best lender for a customer. “To try to manually calculate all the best leases would take more than an hour for any deal. The desk manager doesn’t have that kind of time,” Denove said. Market Scan’s program allows a dealer to save time and money, while ensuring that the consumer gets the best deal on financing, Denove added. “It’s one of those rare products that’s both good for the dealer and the customer,” he said. With Lease Prophet, dealers can compare lease rates from 175 different lenders with up to 100 different variables that can be adjusted in seconds. Once a customer decides on a financing package, the choice is sent directly to the lender, who processes the transaction. Market Scan updates the information daily. Dealers and lenders pay a monthly fee for the service, which they access by dialing into the company’s Internet site. “The consensus of people in the industry is, there are two things that drive a (car) deal cash out of pocket and monthly payments,” said Russell West. “We offer an efficient and cheap solution (for the buyer and dealer).” That means dealers can attract more customers with lower financing costs, yet still maintain their profit. Some of the biggest local dealers have signed on, including Galpin Ford, Keyes Motors and Miller Automotive Group. For buyers, West says the software allows them to lease better cars than they otherwise would have, because of lower rates. “That’s the real magic for the dealer to find (a deal) with a lease program in seconds that’s the best thing out there,” said Russell West. The Wests themselves found a bargain too good to beat a few years back when they were using the system an Infinity Q45 leasing for $300 a month. “We verified it and walked across the street and got two,” said Russell West. Market Scan started out as a regional company serving car dealers in Georgia. Rusty West, a computer science major in college, worked on the computer program for 14 months, making $200 a week, while Russell West subsidized the new business through his own auto leasing dealership. The first program, which ran in Microsoft DOS format on a TS-80 computer, was tested at the dealership. “It was a crude version of what we do,” said Rusty West. Rusty West continued to refine the program, getting input from the sales staff at his father’s dealership. After the Wests’ program began to sell, Russell West sold his car leasing company to focus full time on the new company. After a few years in Georgia, the two sold the company and moved to Southern California, the biggest car market in the nation, to start another database service. “California is just forever and ever known for anything innovative that comes out of the car business,” Russell West said. In 1990, the Wests lined up a distributor in L.A. and ended up selling software systems to the first seven dealers they met with. Still, business growth was slow at first and it was tough getting dealers to buy into the program. “The most difficult thing for any entrepreneur to overcome is credibility,” said Russell West. But eventually sales started to grow. Business truly began to take off when the region’s recession began to ease in 1995. Toyota endorsed the company for its dealers and the Market Scan name became more recognizable in the industry. Last year, Market Scan expanded to the used-car market and this February it released an updated touch-screen version of Lease Prophet. Today, dealers in the 48 contiguous states subscribe to the database. Market Scan processes anywhere from 10,000 to 2 million price checks a day. The company has training centers in New York, Los Angeles and Tampa, Fla. Two more are opening next month in Dallas and Cincinnati. While the company faces competition in regional markets throughout the country, the Wests say the comprehensiveness of Lease Prophet has so far discouraged competitors. “Maybe some of them can (compete), but none of them have,” Russell West said. The Wests have now turned their focus on the Midwest market, where they are not the biggest database service. When Rusty and Russell West started Market Scan, the goal was to sell the company after making some money. But their plans have changed since then. Now the Wests intend to make Market Scan the most comprehensive national leasing database, focused on the “mega” car dealers. “Our software does absolutely magical things,” said Russell West.
