Tag Archive | "Family First Dealer Services"

An Interview with Tony Wanderon

Tony Wanderon is a serial entrepreneur, a former agent, current chief executive of National Auto Care and a private pilot. Agent Entrepreneur caught up with Wanderon to discuss his automotive industry career, what it takes to be a great agent and why parachutes are overrated.

AE: Tony, where are you from and how did you get into the car business?

Wanderon: I was born in Miami. I grew up there, went to school there, met my wife, Christine, there, had kids there, built a company there and then sold that company to American Heritage Life. My dad and grandparents were in the car business. I started when I was 12, in the used-car get-ready department, washing cars and starting them up.

AE: Did you take over your family’s operation?

Wanderon: I worked there through high school and then went to college for two years. I didn’t finish. I started bartending and making good money and it was hard to make it to class. So I worked in restaurants until I was 22, then I got back into F&I at the Chevy dealership that my father was the GM at.

In 1986, I was approached by Rick McMahon, who owned an F&I development company called ERJ Insurance Group. The dealership where I worked sold his warranty and credit life products. As Rick was growing his F&I business, he offered me a job to help him with a new relationship he started with Avis Car Sales, which required him to help open and train F&I in over 200 locations around the country.

AE: What did McMahon see in a young Tony Wanderon?

Wanderon: I think it was probably my desire, my understanding of and love for the business and how I presented myself. And I think he got me at a pretty fair price.

AE: Did you enjoy training?

Wanderon: The training part was fun. That went on for my first three years. In 1989, my son, Spencer, was born. I flew home from a two-week training trip in L.A., Hawaii and Seattle, and Christine had Spencer the night I got home — a month early, by the way. That’s when I came to the decision it was time to start building a business in South Florida, so I could be with my family more.

From 1990 to ’96, we focused on the South Florida market and, over time, we pretty much owned the market. We grew so fast. We soon had over 100 dealers, both big and small. In addition, I found a product that no one really had ever marketed and we put a lot of focus on developing and offering GAP under our ERJ brand. Around that same time, one of my first and best dealers, Dick Assmar, promoted us to his fellow Nissan dealers, which allowed us to grow that market. He also introduced me to the regional VP at Nissan and told them they should hire us to help them with Security+Plus, which we started in the early ’90s and continues today. I still feel that I owe much of my success to Dick for the way he supported me and our company.

That Nissan relationship brought us into national growth mode. We were writing 15,000 to 20,000 GAP policies a year as an administrator. In addition, our development business was growing at over 30% per year. At the peak of that growth, we became an American Heritage Life (AHL) agent. After a presentation I did for a large dealer group, the chairman of AHL, who had attended, came to me and said he wanted to acquire ERJ. Selling was not something that we were looking to do, but in 1997, it was the right time with the right company, so we sold.

Two years later, Allstate Insurance Company bought AHL for its workplace products. I really do not think that our division had any influence, one way or another, when they bought AHL, but I thought it was a great opportunity to prove that our business was a great one for them as well. For the first two years after Allstate, I remained in Miami, running ERJ. In 2001, I was asked to become president of the division. I accepted and relocated to Jacksonville.

AE: I remember when you left Allstate. It was a big surprise.

Wanderon: I like to say I’ve been married for 29 years and that was my only divorce. It was great to have a brand and I built that division and that company with a great team. I learned a lot and met some great people, but I would never go back to working in that type of environment again. I’m into an entrepreneurial, fast-moving organization.

AE: So you started Family First Dealer Services.

Wanderon: My sister, Courtney, and I started it in the dining room of my house. We hired our first employee and pretty soon there were five of us. We were doing a lot of consulting work and generating a lot of business, but our goal was to get back into being an agent-centric product provider. With my long history and clear success with GAP, we focused on that first and introduced our FFDS GAP in 2012. That year, I think we did less than $15 million in sales — which we were pound of — but in 2015, we exceeded $100 million and we now employ more than 100 people.

AE: How did the merger with National Auto Care come about?

Wanderon: In 2013, an opportunity presented itself with Trivest Partners. They had acquired National Auto Care, then known as NAC, and asked if I would go up to Ohio and give them my opinion of the organization. My opinion was this: Here was this company with some great people that really made me feel at home when I was there. They were also a very solid, customer-focused team, and that excited me. Finally, it opened my eyes to the fact that FFDS was missing an important product segment in vehicle service agreements.

NAC was missing some key things as well, but I knew that FFDS could fill in those blanks and that, together, we could both grow and support our agents better, now and into the future. So in November of 2013, we merged our two companies. As I said previously, our growth has been great and our agents have been amazing in supporting us the past few years.

Now, coming from where I came from, this isn’t “big.” It still feels like a family deal, but it is much more than that. And part of that is we have great agents who have been instrumental in our success. Our culture here is to not have as many agents as possible; it’s about having 50 great agents, one in each state and maybe two in the larger states. Unlike many of our competitors, we don’t compete directly with our agents. We’re here to build those partnerships. Having worked as an agent myself, providing that commitment and support probably means more to me than most.

AE: Is the industry’s perception of agents changing? When the magazine and Agent Summit launched, there was a lot of talk about shaking off the image of the guy driving from store to store with a trunk full of products. You don’t really hear about that anymore. The focus is on business development, F&I training, compliance and reinsurance.

Wanderon: There have always been great, good and not-so-good agents. I think that one of the qualities of a great agent is clearly understanding who they work for and that profits are reciprocal. Dealers rely on their agents to help them keep their businesses growing. A lot of the guys who worked for Pat Ryan are super-successful agents because they were part of a very professional training and support organization, and that is how we ran our agency as well.

In addition to training, back when I started, there used to be two or three products and maybe 10 to 15 companies marketing them. Now there are 50 or more products from which dealers can choose and hundreds of administrators and providers. Great agents understand the value that each product has to the dealer, the customer and the agency. Those not-so good agents frustrate me because all they do is sell price, which just hurts everything we have done to advance the industry’s reputation.

But we have to hold people and each other accountable. At the conference, we — and I mean everyone — is training and educating each other. That, I think, has been the greatest benefit of the conference. We really started to bring people together to share good, quality information. When you see other agents outside of the competitive environment, you see them in a different light.

Look at Joel Kansanback and Bill Kelly at Automotive Development Group. In 2015, they were our agency of the year. They were also my agent of the year with my prior company seven years before. Today, they are 10 or 20 times bigger, but they’re still providing quality service, that’s something special when you grow that much and keep up that high level of service. At the conference, other agents can go up to them and say, “How did you get here? How can I do that?” And they will tell you. That’s progress. It was not as open as it is today.

AE: Those are good guys. I think they would be helpful, and I think they would say it’s a good time to be in the industry.

Wanderon: It’s a challenging time. You have to do something to separate yourself. How do you compete against corporate jets, private yachts and big brand names? You show the dealers why all of that costs them money without any return. From my perspective, you can separate yourself by providing great service that fits the dealer’s needs and being persistent.

I once called on a dealer who said, “All you guys are pestering me to buy something. Come back after a year. If you’re still around, I’ll buy something from you.” I did go back. He didn’t remember me, but he kept his word. I signed him up for our warranty business. Persistence pays.

AE: You mentioned there used to be only two or three F&I products, one of which was credit insurance. In our last issue, we interviewed agents and providers who are still having a lot of success with it. The voice of dissent was Brian Crisorio at UDS. He agreed it could be valuable but said there are too many other good products out there to make a hard push for credit insurance.

Wanderon: Credit life and disability can be a great deal for the customer, particularly at a certain point in your life. But for dealers, licensing is an issue, and it is expensive, at least compared to other products. It makes a massive impact on customers’ payments. And I think it was regulated down to the point of being a challenge.

We wrote a lot of credit insurance, but personally, I’m more on Crisorio’s side. There are a lot of options outside the F&I office for customers who are underinsured. But some customers need it, and that’s why you have the menu. You don’t have to force them to buy anything.

That’s what excited me about GAP. I saw a product that would take care of the bank’s negative equity position, keep the customer from going upside-down and protect the dealer’s brand. Which one would I like to have personally? Clearly, GAP, and that’s what it often comes down to.

AE: Do you believe Millennial car buyers make good F&I customers?

Wanderon: I don’t look at someone and say, “You’re 20 years old. You’re different.” I say, “Are you smart or not so smart?” Our job is to offer the products that are going to help them. The service contract is a good example. How can a young customer afford a $2,000 or $3,000 repair when they’re struggling to make their monthly payments? And it has to be affordable. Can they afford another $10 a month? Probably. Could they afford $60 a month? Maybe not.

I don’t know why anyone would be afraid of an educated younger person who has questions. You need to offer products not for your own commission, but because the customer really needs them. If you can explain why, you have an opportunity.

AE: Indeed. Last question, Tony: What do you like to do in your spare time?

Wanderon: I fly. I’ve been working on it for a while. I got my license and bought the plane two years ago. We use it for short trips to visit family. I’ll fly up to Ohio once in a while, too. I like flying because it teaches you discipline. You have to go through your checklists and make sure everything’s right.

AE: What kind of plane did you buy?

Wanderon: It’s a Cirrus SR22. You may know it as the plane that has a built-in parachute. The former CEO of Walmart made a parachute landing last year. I guess it’s nice to have if something goes wrong, but you can’t get too comfortable up there. If you like the parachute because it gives you a false sense of security, you shouldn’t have it.

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Private Equity Principal Behind NAC, FFDS Deals to Speak at PALS

LAS VEGAS — Organizers of the annual P&A Leadership Summit have announced that Jorge Gross, principal of Trivest Partners, the private equity firm that purchased National Auto Care (NAC) and Family First Dealer Services (FFDS), has agreed to speak at the 2015 event, which will be held Sept. 8–10 at Paris Las Vegas.

Trivest Partners made headlines in 2013 when it acquired NAC and FFDS; the companies merged in September of that year.

“I look forward to attending the P&A Leadership Summit and discussing the acquisitions and merger of National Auto Care and Family First Dealer Services, which have proven to be a tremendous investment for Trivest Partners,” Gross said. “I will touch on valuation, the variables we looked for, the aspects we liked and perhaps a few items I wish I had known before we completed the transactions. I will also speak to the process and effort of combining the two businesses.”

Gross joined Trivest Partners in 2006, after a successful tenure at Credit Suisse Boston. He has since been involved in over 20 transactions with an aggregate value of more than $600 million. Gross currently serves on the board of directors for NAC as well as GetixHealth and Northfield Industries.

“This is a rare opportunity to hear the inside story of a blockbuster deal in the P&A segment,” said David Gesualdo, show chair and publisher of F&I and Showroom and P&A magazines. “Jorge Gross will undoubtedly have the rapt attention of every audience member.”

Registration is now open for the P&A Leadership Summit. Attendees who register by Aug. 7 will enjoy a $100 early-bird discount. More information, including additional speakers and travel, is available at the event’s website. To inquire about sponsorship or exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or call 727-947-4027.

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Ryan Schumacher Appointed VP of Finance, NAC & FFDS

Westerville, Ohio – The combined entity of National Auto Care Corp. (NAC) and Family First Dealer Services (FFDS), appointed Ryan Schumacher to vice president of finance. In the new role, Schumacher will lead many of the financial management initiatives underway in preparing the company for growth. He comes to NAC & FFDS with more than six years of experience in financial management at Jacksonville-based Allstate Dealer Services, where he was responsible for financial forecasting/analysis, expense management and financial modeling. Schumacher will report to Tony Wanderon, CEO.

“Ryan brings a wealth of knowledge in the insurance industry to our company and our partners,” said Wanderon. “His experience in the financial management of administrators and their underwriters will play a key role in our acquisition activity in the F&I space.”

“We are excited to add Ryan to the team. Ryan’s clear understanding and history of delivering strong operating results will be a great asset to our organization,” said Christina Schrank, president, NAC.

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Courtney Wanderon Named VP of Sales for NAC & FFDS

Westerville, Ohio – The combined entity of National Auto Care Corp. (NAC) and Family First Dealer Services (FFDS) promoted Courtney Wanderon to vice president of sales. In this position, she will lead the sales and client relations teams in the support and development of the company’s agent network and strategic partners. Wanderon will report to Tony Wanderon, CEO of NAC and FFDS.

“Over the past 20 years in the automotive and insurance industry, I have had the pleasure of working with some of the best partners in this industry,” Courtney Wanderon noted. “I am excited about the opportunity to lead the team and look forward to bringing the most innovative products and incentive programs to the market. We are only as strong as our partners and our success is only measured by the success of our partners.”

“Courtney brings a wealth of knowledge in the automotive and insurance industry to our company and our partners,” said Tony Wanderon. “With her experience in all phases of our business including vice president and co-founder of FFDS, I am confident that Courtney will provide leadership and passion that is second to none.”

“We are thrilled to have Courtney lead our sales team. Courtney’s understanding of agent and dealer needs will be key as we continue to evolve, expand and enhance our product and service offerings to ensure we meet those needs,” said Christina Schrank, president, NAC.

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NAC & FFDS Announce Plan to Merge

Ponte Vedra Beach, Fla. – National Auto Care Corp. (NAC) and Family First Dealer Services LLC (FFDS) have reached an agreement to merge the two companies. The transaction will provide the platform for the combined company to excel as one of the leading finance and insurance providers in the automotive industry.

The merger will bring together the stability, infrastructure and long-standing history of NAC’s vehicle service contract business with FFDS’ cutting edge innovation and full suite of ancillary products. Tony Wanderon, president and founder, FFDS, will lead the newly combined NAC entity as CEO. Christina Schrank, with nearly 20 years of experience, will continue in her current role as president of NAC, and Courtney Wanderon will assume the role of executive vice president of FFDS.

Post-merger, the new company plans to multiply its efforts and create a one-stop administrative resource for an expansive portfolio of products, leading edge programs and best-in-class customer service to agents, their dealers, OEMs and financial institutions nationwide. The combined company will also focus on providing innovative technology solutions, marketing services and branding support to enhance the growth and profitability of its customer network. Coupled with the solid financial backing of Trivest Partners, the new company will accelerate the already impressive growth trends at NAC and FFDS.

Tony Wanderon stated, “NAC and FFDS are perfect complements to each other. With FFDS’ innovation and ancillary product portfolio and NAC’s infrastructure and strong VSC business, we are excited about the future of the combined business and our expanded ability to provide our partners with the tools and resources they need in this ever changing market.”

“NAC and FFDS are both companies who are dedicated to quality products and impeccable customer service; together, we will not only have the ability to stand true to those commitments, we will also have the combined capacity to expand and heighten them in the future,” said Schrank. “This transaction will provide a centralized resource for our agents and dealers, increase our overall capabilities, and empower new solutions and success for our customers.”

The transaction is expected to close in the next 45 days.

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GAP Past & Future: Industry Experts Weigh In

Guaranteed asset protection, better known as GAP, is a product that is ubiquitous in the industry today, but it was not always that way. Where exactly did it come from? And where do our experts from Allstate Dealer Services, James Dean and Tara Webb; Tony Wanderon from Family First Dealer Services; Safe-Guard’s Dave Duncan; and Matt Croak from Wise F&I believe that it’s headed?

Those experts agree that GAP got started in the mid-to-late 1980s, primarily as a lease product. However, the lease companies themselves quickly started adding it to their own terms, leaving GAP providers with the need to retool it. That is when the product as we know it today was born.

“GAP insurance was introduced to the marketplace in the early 1980s,” noted James Dean, Director of Product Development, and Tara Webb National Sales Director, Allstate Dealer Services. “The traditional name for GAP insurance is ‘Shortfall’ which is still used today by some manufacturers. The product was developed to cover the shortfall on finance agreements and leases.”

“It was the most likely area for customers to have negative equity, as leases had small or no down payments, and customers were paying little towards the principal at the start of their lease terms,” said Dave Duncan, president, Safe-Guard Products International LLC. “GAP eventually became a complimentary product with most leases. Shortly thereafter, retail loan customers began experiencing negative equity, and GAP shifted to a core product for the retail installment loan customer.”

“GAP, as an addendum to the finance contract, was a novel concept to some degree,” said Matt Croak, president, Wise F&I. “We realized early on that lender acceptance would be critical so we began slowly with our first approval from the former GMAC in the early ’90s. We quickly expanded the lender submission program to include over 200 lenders active in the dealer space. Over a period of 4-6 years, lender acceptance of GAP grew tremendously. The lender submission process and the accompanying legal review assisted us to further develop and define the features and benefits of a typical GAP contract as we know it today.”

Tony Wanderon, president and CEO, Family First Dealer Services, noted, “The terms started getting longer, prices went up and the need for the product grew, from the consumer perspective. But it was on its infancy on the dealer side. People liked it, but didn’t feel it was a main, core product to offer to customers. Some didn’t like talking about negative equity at all — talking about it might push [the customer] not to purchase. But as time went on and got into the mid-’90s, the product started to take hold.”

At that time, Wanderon said, there were a lot of questions in the industry about whether it was an insurance product or a debt forgiveness product. Federal regulators also were trying to figure out where it fell, so they could deal with it appropriately. Anticipating an unfavorable verdict, many providers dropped their offerings. Ultimately, the government declared that GAP was not a product that needed to be included in the interest rate of the loan — although stipulations were put in place as to what it should and should not include. This made it a product that was suddenly more attractive to lenders to include in their financed packages.

“It’s one of the few products that benefits all parties involved,” Wanderon noted. The consumer is covered and taken care of, dealers are looked at in a negative way if the customer is upside down, so now they can negate this. And it covers the bank loan, so if there is negative equity, banks can still collect the full amount.”

An Evolving Product
That is not to say that the product has not continued to change, however. Early versions were missing the structure it has today — there were no caps on amounts to be paid, the policy and benefits provisions were very broad, there was no underwriting of the product and there was not any real actuarial risk analysis of GAP at the time. So it has evolved from where it once was.

“Changes in financing, negative equity and loan terms have been primary drivers to the evolution of the GAP product,” noted Dean and Webb. “Primary carrier deductible reimbursement, increased loan to value limits, expanded loan terms, cancel-ability and GAP Plus are features that were not components of GAP when it was originally introduced in the marketplace. GAP was originally considered an insurance product in many states, and through our extensive work with the members of GAPA, we have collectively made strong headway in influencing state adoption of a more consumer-friendly, debt waiver product. The rating structure has also evolved from a one rate structure of earlier versions to a rating structure that more closely aligns with the loan/lease term.”

Dean and Webb also noted that there have been several factors helping to drive the growth of GAP in the past, that they believe will continue to be drivers in the future. “Two of the more important drivers in GAP performance are residual values and loan to value (LTV) amounts. As we move through different economic cycles, the impact of these two factors affects the loss performance of GAP. In the past few years, GAP loss performance has been stable and better than prior years; however there are definite indications that this trend is changing, particularly in residual deterioration. GAP’s success in the marketplace has been a result of: a) increased LTVs and higher amounts financed driving larger “gaps” in the event of total loss; b) expanded multi-media forums providing a better understanding to consumers and lenders of the value the product brings to the borrower; and c) fluctuating vehicle values correlating with fuel prices – a borrower can be in a negative equity, then a positive equity, then back into a negative equity position all due to factors out of their control. Borrowers are becoming increasingly aware of this and choose to purchase GAP to protect themselves against these factors that out of their control.”

“Greater acceptance and higher production volume brought greater scrutiny to GAP,” noted Croak. “The net effect resulted in GAP contract terms that delivered superior protection to the consumer. The elimination of ‘greater of’ language within the calculation of the GAP amount is one example where the typical GAP contract was refined for the consumers’ benefit. Additionally, the concept of ‘True GAP’ or ‘Settlement GAP’ is more apparent now than ever. As with most contracts in general, the notion of ‘good faith’ is very important. Modern GAP contracts do a much better job of defining the roles and responsibilities of both the consumer and the creditor as it relates to GAP.”

Croak went on to note that he has seen stabilization in GAP in terms of pricing in recent years as well. “Early on, we saw insurance carriers enter and exit the GAP space as an underwriter on a frequent basis. This seems to have now stabilized,” he said. “We have been marketing GAP since the beginning and have been able to compile decades worth of data, allowing us and many of the prevailing GAP underwriters to develop better actuarial analysis. This data allows for greater understanding of how GAP performs, resulting in more responsible and accurate, risk-based pricing decisions. “

“I think it became a very structured product, and a very consistent product and program in the mid 2000s,” Wanderon said. “Lenders started looking at it a lot more closely, making sure it had proper insurance, proper capital, that admins are managing the customers properly, etc. The product today is very solid, consumer-friendly and meets all the regulatory requirements that have been set.”

Duncan laid out some of the changes he has seen in the product as well: “The terms of loans have grown, resulting in three categories for the GAP product — 0-60 months, 61-72 months and 73-84 months. Settlement coverage has been added to many programs, since retail GAP only covers the difference between the vehicle’s value determined by NADA/KBB and the loan payoff amount. If the primary insurance company has determined the settlement to be less than the actual cash value, then the retail GAP customer is stuck paying this difference. And ‘GAP plus’ is another option that can be offered. The program provides an additional benefit, usually in the amount of $1,000, that the customer can use towards the purchase of his or her replacement vehicle.”

Croak also focused on the regulatory environment, noting that it is something dealers, agents and providers will all have to be aware of, not just for GAP, but for all F&I products. “In recent years there has been a large focus on compliance by federal and state regulators on all products that are offered in the F&I office,” he noted. “As unfortunate as it may be, GAP products and other F&I product offerings will be influenced by these regulations. On a federal level, the CFPB is asserting influence on these products, not so much at the dealer level, but through the lenders. The way that Gap is marketed could be influenced by these variables.”

Wanderon in many ways sees GAP as being one of the products that helped propel F&I into the business that it is today. He noted that, before, most dealerships carried only a handful of ancillary products, but GAP was among those that moved the market to offer, in some cases, 20-plus products for consumers to choose from. “It spawned an industry to offer products to customers in a wide range of categories,” he noted.

So where can GAP go from here? Our experts see growth for the product, but in different ways.

Wanderon believes penetration rates will average around 30-40 percent — but he believes that growth will occur as more cars are sold, and therefore GAP is offered to more customers. He also sees the penetration rate climbing in certain cases, where the customer makeup of the dealership is a bit more open to seeing the risk/reward benefits. In those specific cases, he noted, he sees the penetration rates hitting around 60 percent.

“There are infrequent requests to consider pricing GAP around LTV, credit scores, amount financed and expanded term bands,” said Dean and Webb. “These are components that have been considered for many years but have not been fully implemented by the industry due to the fact that it is currently a simple product for dealers to sell at three or four easy term bands. This, coupled with both lender governance on the product structure and the administrative burden carriers would face to create a more sophisticated pricing approach, will likely deter significant changes to the way GAP is currently packaged and sold.”

They don’t see it as remaining completely static, however. “CFPB outcomes may drive the manner in which GAP is packaged and priced to consumers in the future,” said Dean and Webb. “Allstate is SOC 1 certified, an active member of GAPA and maintains a watchful eye on calibrating our products to fit the changing regulatory environment and consumer marketplace. We have seen more states adopt regulation requiring lenders to properly manage cancellation refunds due to prior litigation; changing lender governance practices of the product could shape GAP in the future.”

Duncan sees the penetration rate itself increasing. “GAP penetration is directly related to the aggressiveness of lenders,” he said. “We know that longer loan terms and lower down payments all lead to an increase in GAP penetration. According to Experian Automotive, the average loan term for new and used vehicles is up to 65 months for new and 61 months for used, as of Q2 2013. While training and the macro-environment can have an impact on market share, really educating customers by using a good interview, focused menu selling and prepared objections handling will make the biggest difference.”

For the product itself, everyone is optimistic. “I see it becoming much more of an integrated process for a consumer to process the claim quickly, pay quickly and understand the impact the event has had,” Wanderon said. “I can see it morphing into more of a consumer-friendly program; I don’t see a lot of changing and adding substantial benefits, because then you increase the price, and lenders control what price they will advance on the loan. There could be something in the future: If the benefits go up, will the lender allow the costs to go up?”

“The success of GAP as a product has truly been driven by the long-term providers, working in conjunction with major lenders and underwriters, to continually refine the protection provided by GAP coverage,” Croak noted. “Expanded lender guidelines, driving increased financing volume during the second decade of GAP’s existence, provided a foundation for making GAP as successful as it is today. As we move into the future, increasing market share will involve the continued partnership of providers and lenders along with enhanced training for those at the F&I desk. If we, as an industry, continue to equip F&I personnel to better offer, describe and provide feedback to consumers, we’ll continue to see increased growth in GAP originations.”

“We anticipate GAP to continue to be a strong value-add to consumers looking to protect themselves from risk and factors out of their control,” said Dean and Webb. “Given the increase in multi-media forums available to consumers, we anticipate an increasing awareness of the product and thus a stronger demand from those who need it – regardless of the channel in which it is distributed.”

“I see GAP continuing to be a top-performing product among ancillary F&I products,” Duncan noted. “Negative equity is not going away anytime soon, and properly educated customers really see the product’s value. GAP will be successful in all channels where retail financing is involved. Since retail financing is getting more aggressive, GAP should benefit from this dynamic. With the downturn of 2008, fewer vehicles were financed and banks were requiring larger down payments, so GAP sales decreased. With the return of aggressive financing, GAP penetration has recovered nicely.”

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