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EFG Companies: Dealers Must Embrace Industry Paradigm Shift


DALLAS, Texas — Staffing and customer engagement models are the top issues impacting the future health of the retail automotive industry, EFG Companies President and CEO John Pappanastos said today.

The F&I product provider’s chief executive delivered his comments as part of a state of the industry address the company posted on its website. Pappanastos encourage dealership principals and senior managers to quickly address those issues or risk becoming a dinosaur in today’s rapidly changing consumer car-buying mode, noting that digital buying habits, millennial and Gen Z consumers, and women are forcing industry change.

According to the National Automobile Dealers Association’s 2017 Workforce Study, retail automotive suffered from a 43% turnover rate — up two points from 2016. Additionally, the automotive industry experienced an 88% attrition rate among female new hires, and a below average rate of millennial new hires when compared to other industries.

Pappanastos said many retail automotive businesses lack a comprehensive plan to become an employer of choice, and instead rely heavily on traditional “bell-to-bell” hours, commission-only payment plans, and limited training. He urged them to immediately develop a strategy for hiring, training, and promoting the best and brightest employees to operate in a world where consumers are demanding a more digital process with a better customer experience.

The executive noted that a single poor hiring decision in F&I can easily result in up to $75,000 in lost profit due to onboarding costs and lost production, adding that the retail automotive industry’s focus on daily operations also hampers leadership development and obscures the growth path for millennial hires who, as a group, require opportunities for promotion.

The F&I product executive also touched on recent research from Cox Automotive, which showed that 80% of consumers want to complete at least half of the car-buying process digitally. He also cited a 2018 Deloitte study showing that “dealers create a fragmented and inconsistent approach to the customer,” which leads to inefficient customer contact, inconsistent messaging, and ultimately failure to sell and build loyalty.

“While I realize change is difficult, dealership principals must incorporate greater consumer-facing digital platforms into their dealerships,” said Pappanastos, adding that hiring employees who are experts in online customer engagement and digital sales approaches represents one solution. “Failure to do so will result in lost revenue. We must remember the old adage of ‘meet the customer where they are.’ And today’s customer is clearly online.”

Pappanastos also encouraged dealerships not to lose sight of compliance. “Job skills are easy to assess. What’s difficult is finding candidates who have solid character,” the executive said. “During these tumultuous times, dealerships must maintain a high degree of integrated compliance. The resulting fines, and damage to reputation, can result in significant business loss due to very clear and public online postings and reviews.”

Pappanastos remarks during his state of the industry address focused on the future health of the retail automotive industry and sounded a wakeup call to dealership principals to quickly embrace changing consumer buying preferences. He also encouraged future millennial and Gen Z employees to seek out careers in retail automotive, noting that exciting changes and their opportunity to make industrywide impact.

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EFG Companies: Dealers Must Embrace Industry Paradigm Shift


DALLAS, Texas — Staffing and customer engagement models are the top issues impacting the future health of the retail automotive industry, EFG Companies President and CEO John Pappanastos said today.

The F&I product provider’s chief executive delivered his comments as part of a state of the industry address the company posted on its website. Pappanastos encourage dealership principals and senior managers to quickly address those issues or risk becoming a dinosaur in today’s rapidly changing consumer car-buying mode, noting that digital buying habits, millennial and Gen Z consumers, and women are forcing industry change.

According to the National Automobile Dealers Association’s 2017 Workforce Study, retail automotive suffered from a 43% turnover rate — up two points from 2016. Additionally, the automotive industry experienced an 88% attrition rate among female new hires, and a below average rate of millennial new hires when compared to other industries.

Pappanastos said many retail automotive businesses lack a comprehensive plan to become an employer of choice, and instead rely heavily on traditional “bell-to-bell” hours, commission-only payment plans, and limited training. He urged them to immediately develop a strategy for hiring, training, and promoting the best and brightest employees to operate in a world where consumers are demanding a more digital process with a better customer experience.

The executive noted that a single poor hiring decision in F&I can easily result in up to $75,000 in lost profit due to onboarding costs and lost production, adding that the retail automotive industry’s focus on daily operations also hampers leadership development and obscures the growth path for millennial hires who, as a group, require opportunities for promotion.

The F&I product executive also touched on recent research from Cox Automotive, which showed that 80% of consumers want to complete at least half of the car-buying process digitally. He also cited a 2018 Deloitte study showing that “dealers create a fragmented and inconsistent approach to the customer,” which leads to inefficient customer contact, inconsistent messaging, and ultimately failure to sell and build loyalty.

“While I realize change is difficult, dealership principals must incorporate greater consumer-facing digital platforms into their dealerships,” said Pappanastos, adding that hiring employees who are experts in online customer engagement and digital sales approaches represents one solution. “Failure to do so will result in lost revenue. We must remember the old adage of ‘meet the customer where they are.’ And today’s customer is clearly online.”

Pappanastos also encouraged dealerships not to lose sight of compliance. “Job skills are easy to assess. What’s difficult is finding candidates who have solid character,” the executive said. “During these tumultuous times, dealerships must maintain a high degree of integrated compliance. The resulting fines, and damage to reputation, can result in significant business loss due to very clear and public online postings and reviews.”

Pappanastos remarks during his state of the industry address focused on the future health of the retail automotive industry and sounded a wakeup call to dealership principals to quickly embrace changing consumer buying preferences. He also encouraged future millennial and Gen Z employees to seek out careers in retail automotive, noting that exciting changes and their opportunity to make industrywide impact.

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EFG Companies 1st “Administrator of Size” to Provide Dealers with Automatic Claims Approvals through Self-Adjudication Technology


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today the launch of EFG Express Claims, one of the industry’s first claims automation systems enabling dealerships to self-adjudicate claims and receive automatic approvals. For more information, visit http://bit.ly/EFGClaims.

EFG Express Claims automates the claims adjudication process using self-service features within DRIVE, EFG’s client portal. Using EFG Express Claims, dealership service managers have the ability to:

  • search for open contracts on behalf of their customers and see exact coverage levels;
  • open and submit claims;
  • automatically adjudicate and approve claims meeting certain parameters set by dealership management and EFG; and,
  • receive automatic payment by corporate credit card within one hour of claim approval.

“In today’s tight sales environment, dealers are focusing their attention on creating repeat business through the service drive and dealership-wide improvements in customer service,” said John Stephens, Executive Vice President, EFG Companies. “That’s why we developed the EFG Express Claims platform. Think about it from the service manager’s point of view. When a customer does not have their vehicle service contract information, which happens quite often, there is usually a multitude of phone calls and emails to obtain the information, causing delay in both filing the claim and getting the vehicle in the queue for repairs. With EFG Express Claims, the manager can look up all in-force contracts for any given vehicle. They can electronically submit the claim and receive instant approval. The customer is happy because work can begin more quickly. The service manager is happy because they can process the work on the vehicle more quickly and secure payment faster.”

For those claims that fall outside of the parameters for automatic approval, EFG Express Claims reduces the manual process of calling a claims service representative, and repeating all the necessary information for them to enter it into EFG’s system. Instead, the platform submits the claim and populates it within EFG’s internal system for claims processing. This further speeds up the entire process across the board.

“Each year, EFG endeavors to expand the company’s training, protocols, and software solutions in the effort to provide expeditious and high-quality customer service for contract holders and dealership service managers,” said Ken Overly, Vice President, Operations, EFG Companies. “Ninety-six percent of our claims are paid in one hour. We maintain an average 26 second speed to answer, and 67 percent of our total claims are one-call claims. However, no matter how quickly our team can answer calls, fill out claims information, and process the claim, it still takes time to open and close a claim. With EFG Express Claims, we make the process instantaneous in some cases, and drastically cutting claim processing time down for more complicated claims.”

EFG’s claims adjusters maintain an average of 12 years of experience, and are ASE and BenchmarkPortal-certified. Since 2010, EFG has invested more than $17 million in technology resources and IT development, with the goal of making EFG the easiest and most efficient company with which to conduct business. In addition to EFG Express Claims, EFG provides full contract automation, online contract cancellation quotes, online cancellation, a sophisticated skill-based routing system directing complex claims to the best qualified adjuster, and an online Parts Wizard to identify the highest quality parts from suppliers across the nation, at the lowest price, and in real time.

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EFG Companies Launches Enhanced Lifetime Wrap Coverage to Complement Drive Forever Worry Free Limited Lifetime Powertrain Protection


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, today announced the launch of the Drive Forever Worry Free Lifetime Wrap, an enhancement to the company’s market-differentiating limited powertrain protection. For more information, visit http://bit.ly/2lUkufY.

The Drive Forever Lifetime Wrap is designed to help dealers close more deals at a higher gross with improved product pricing, expanded eligibility, and an underlying complimentary coverage component.

The wrap is a second coverage upgrade option for dealers to utilize when providing customers with complimentary Drive Forever Worry Free Limited Powertrain Protection. Until now, dealers had the option to upgrade customers to a full vehicle service contract with terms up to 96 months/120,000 miles. The Drive Forever Lifetime Wrap provides expanded coverage options with no mileage or time limits.

With the Drive Forever Lifetime Wrap, cost-conscious consumers will be better able to preserve their vehicle’s value and their savings. Beyond the benefits related to vehicle repairs, the coverage is fully transferrable, further enabling consumers to negotiate beyond just the value of their vehicle at resale.

Drive Forever Worry Free is a limited lifetime powertrain program for dealers to offer complimentary as a way to differentiate themselves from the competition. The Drive Forever Lifetime Wrap is a exclusionary coverage that matches the lifetime term of the complimentary product. The coverage upgrade includes roadside assistance, rental reimbursement, and a standard $100 deductible for the first three years.

Interest rates are expected to rise three times in 2017 and analysts are predicting lower used-car values as off-lease vehicles enter the market. With an uncertain economic outlook, dealers are looking for programs that create more foot traffic and help to close more deals at a higher margin.

“With dealer profit margins being squeezed in recent years, we’ve taken an in-depth look at how we at EFG can measurably facilitate dealer profitability, and customer retention.” said John Pappanastos, President and CEO of EFG Companies. “In our ongoing contract holder research, we evaluate our protection products with regard to the value perceived by the consumer. In the case of Drive Forever, on average, 82 percent of the time, contract holders rank it as a top 3 reason as to why they chose to purchase from a participating dealer. Based on this extensive research and ongoing feedback from dealers, we created the Lifetime Wrap as a natural extension of a program that provides distinct benefits to both dealers and consumers.”

Beyond the market-differentiating benefits of EFG’s complimentary Drive Forever Worry Free program, dealers have a better opportunity to stay ahead of the competition with an upgrade that gives customers enhanced coverage for the life of their vehicle, not just their loan.

This product gives dealerships an immediate means of capturing market share and increasing profit margins by turning the sales process into a more value-based conversation.

As always, EFG backs this new product offering with its strategic engagement model from an AFIP-certified field team, and a nationally award-winning claims administration team that is ASE-certified and recognized as a Center of Excellence by Benchmark Portal.

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EFG Predicts Tighter Credit, Continued Focus on Compliance for F&I in 2017


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced its 2017 predictions and recommendations for the automotive and powersports F&I market today. These insights, formed through thousands of conversations with the nation’s leading dealership principals and lenders, reflect an air of cautiousness for 2017. However, there are many options for retail automotive/powersport dealers, lenders, and F&I agents to successfully navigate an uncertain business climate for a prosperous 2017. For more information, visit http://bit.ly/EFGIntel

“Even though the election is over, we continue to see a murky forecast for the F&I market moving forward,” said John Pappanastos, President and CEO, EFG Companies. “Consumers clearly want a new – and at least partially online-buying process. This trend has significant impact for the F&I industry across retail and lending channels. We also expect to see credit tightening on the consumer side and a foreshadowing of reduced auto manufacturer incentives for dealers, which will impact their margins. Finally, we don’t believe federal regulatory oversight will diminish to the level that is being hyped. So, we strongly believe compliance will continue to challenge dealers and lenders. All that being said, we believe that the changes transforming the auto industry will create unique opportunities for dealers and lenders to leverage as they look to expand their business.”

Utilizing its 40-year history in the F&I industry, EFG Companies offers the following predictions for 2017:

Flat Volumes, Compliance, and Customer Retention for Retail Automotive

While the Consumer Financial Protection Bureau (CFPB) authority may be up in the air, dealers will need to stay the course on compliance for 2017. Remember, the Federal Trade Commission (FTC) has jurisdiction over dealers and its operations are not impacted by any potential changes within the CFPB. Analysts are predicting flat unit sales volumes, pushing dealers to maximize their investment by squeezing more profitability out of their F&I operations. Customer retention efforts will increase, prompting dealers to shore up their service drive and fixed operations to deliver the “luxury car” level of service. In addition, an influx of off-lease vehicles will increase used car inventory while putting pressure on pricing. Whether purchasing new or used, the customer will be king in 2017. John Stephens, Executive Vice President, Dealer Services

Return on Investment and Shorter Transaction Times Key for F&I Agents

With retail automotive dealerships feeling increased pressure, F&I agents will also experience a trickle-down effect to clearly demonstrate a return on investment for the F&I products they place at a dealership. Agents will also feel pressure to help dealers shorten transaction time and pivot their operations to support online transactions. Agents will closely monitor their own businesses to keep production levels high and begin focusing more on acquiring new dealership business. Adam Ouart, Vice President, Agency Services

Rising Interest Rates and Portfolio Evaluations Will Challenge Lenders  

Regardless of what happens with the CFPB, lenders will also need to stay the course. You don’t stop treating customers right on the off chance that the government might not see your good behavior. Increasing interest rates will pressure lenders to tighten lending standards and evaluate other options to protect their loan portfolio outside of APR and loan terms. The same can be said for credit unions and other lenders that offer auto loans directly to consumers. I expect more lenders to evaluate how consumer protection products can benefit them from the standpoint of differentiating their institutions from the competition, protecting their loan portfolio, increasing loan volume, and controlling compliance. In addition, dealers will re-evaluate their lender roster, confirming a broad spectrum of partners that specialize in different credit tiers, and help dealers meet their profitability goals. This will put pressure on lenders to evaluate their service model for dealerships and make adjustments to tackle mutual dealer and lender challenges.
Brien Joyce, Vice President, Specialty Services

Growth and Lender Challenges Continue for Powersports Dealers

Although unit sales fell in the second half of 2016, we anticipate volume will pick up in February when early income tax refunds arrive. There will be a slight growth in the powersports market overall in 2017, with dealers putting greater emphasis on increasing aftermarket income through the sale of F&I products. Lenders that remain in the powersports market will want to insulate their loans and may look to offering their own complimentary F&I products. As powersports dealers continue to be starved for lenders, up-to-date technology resources, and committed employees, they will pressure their vendors and product administrators to provide outside the box solutions for these obstacles, such as digital F&I services. Glenice Wilder, Vice President, Powersports

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EFG Companies Launches 1,000,000 Mile Limited Powertrain Protection


DALLAS, TX – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today the launch of a 1,000,000 Mile Limited Powertrain Protection program for motorcycles. This program is designed to foster increased customer loyalty, referrals, and unit sales by addressing pressing motorcycle consumer needs.

While the powersports industry is currently experiencing a period of year-over-year growth, everyone in the industry has an eye on the horizon for the next economic downturn. Dealers are looking to maximize sales while they last and fortify their operations for the future.

“Today’s customers are already in the mindset of being very careful with where they spend their money, and are looking for the best value for the dollar. This has resulted in an enhanced pre-owned bike market over the last few years,” said Glenice Wilder, the vice president of EFG Companies Powersports Division. “By offering 1,000,000 Mile Limited Powertrain Protection, motorcycle dealers have the ability to differentiate their operations, and increase customer loyalty and new customer sales, by providing customers complimentary protection for their bikes.”

The 1,000,000 Mile Limited Powertrain Protection is designed to be offered complimentary on thoroughly-inspected, eligible bikes up to 10 years in age with less than 60,000 miles. The product provides coverage for the engine and transmission up to 1,000,000 miles, with towing assistance.

Customers then have the opportunity to enhance the coverage with an extended vehicle service contract, expanding the covered components and providing additional benefits including roadside assistance, rental reimbursement and unlimited number of claims. By upselling customers to the extended coverage, powersports dealers have the ability to increase their profit per unit during a time when every sale counts.

“As our market has grown into a more competitive space, powersports dealers need more than generic customer service promises to differentiate their business,” said Chris McIntyre, the CEO of EagleRider. “A program like the 1,000,000 Mile Limited Powertrain Protection from EFG helps dealers build a stronger brand message around customer service to drive more traffic and customer loyalty.”

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