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Software Contracts are bad for everyone

mattwatson81

Getting Refreshed
Apr 10, 2009
334
10
First Name
Matt
Software contracts are bad for dealers and bad for vendors.

1. If the company sells your contract to a bank, what monthly revenue do they have to support you down the road?
2. What if you decide you don't like the software?
3. If you under contract what assurance do you have that their support will be up to par? You signed the contract, why do they care anymore?
4. Is their software so bad they expect you to cancel? Why do they have a contract?

Many vendors force dealers to sign contracts and then sell the contracts as a quick way to make cash. The problem for the vendors is they have no revenue to support the software they are selling long term.

If you are forced to sign a contract, make sure the company can't sell the contract off. You might end up calling a bank for CRM support.

Anyone have an contract horror stories they want to share?

I know a dealer that has a 25 year DMS contract. Talk about insanity!
 

✨ AI Highlights

  • A dealer raises concerns about software contracts in the automotive industry, arguing they disadvantage both dealers and vendors by creating misaligned incentives: vendors may sell contracts to banks for quick cash while lacking resources to support the software long-term, and dealers lose leverage to demand quality support once locked in.
  • The key recommendation is to negotiate contract terms that prevent vendors from selling agreements to third parties, as this practice can leave dealers without adequate vendor support.

A dealer raises concerns about software contracts in the automotive industry, arguing they disadvantage both dealers and vendors by creating misaligned incentives: vendors may sell contracts to banks for quick cash while lacking resources to support the software long-term, and dealers lose leverage to demand quality support once locked in. The key recommendation is to negotiate contract terms that prevent vendors from selling agreements to third parties, as this practice can leave dealers without adequate vendor support.

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