Tag Archive | "F&I Products"

‘Total Loss Protection’ at Center of NY Dealer’s $298K Settlement With State AG


ALBANY, N.Y. — Nissan of New Rochelle will pay more than $298,000 to settle claims that the dealership willfully defrauded 298 car buyers of a total of $276,127 by tacking on a window-etch program that included a “Total Loss Protection” benefit after customers had agreed to a price for the vehicle and often without their knowledge or consent, Attorney General Eric Schneiderman announced this week.

In addition to refunding the cost of the product, which varied from $215 to more than $5,000 per vehicle, the dealership’s owners have agreed to pay the state $22,084 in penalties, fees and costs. They also agreed to “certain reforms” of the dealership’s sales and F& processes.

“Consumers should not have to worry that they are being scammed into adding on bogus products and services when they purchase a car,” Schneiderman said. “Buying a car is already a major investment for many families, and tacking on thousands of dollars extra can become a significant financial burden. I am pleased that we are able to return hundreds of thousands of dollars in restitution to the nearly 300 consumers who were scammed and defrauded.”

According to Schneiderman, his office’s investigation into the 2015 complaint revealed that the product, described as a window- and windshield-etch program backed by a $3,000 or $5,000 guarantee against theft, was deceptive or outright fraudulent on at least three counts — tacking on the cost of the product without customers’ knowledge being one of them.

The regulator also charged that conditions and limitations related to the guarantee made it “essentially worthless.” The regulator noted that only one car buyer was issued credit under the program. The attorney general’s investigation also revealed that the “etching” of each vehicle’s VIN was actually a sticker affixed to the inside of a door or doorjam, and in many cases was not performed at all.

As part of the settlement, Nissan of New Rochelle’s directors have agreed to include full disclosures and explanations for each product and express consent on the car buyer’s part before any products can be added to the deal, according to the regulator’s statement.

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First Choice Car Care Launches High-Mileage VSC Plans


TAMPA, Fla. — First Choice Car Care today launched new five-year, 100,000-mile vehicle service contract (VSC) plans for vehicles up to 20 model years old and have up to 150,000 miles on their odometers.

First Choice Car Care is designed to appeal to buyers of older vehicles who desire investment protection at a reasonable cost, according to company officials. It also encourages dealers to retail units profitably they would otherwise wholesale for a loss.

“These plans help us sell an additional 50 to 75 high-mileage units a year, and because of their competitive pricing, they also help me close more subprime deals,” says Angela Barrett, lead finance manager for Jenkins Nissan in Leesburg, Fla. The dealership retails about 150 new and used vehicles a month.

Barrett added that the costs of the plan give the dealership more wiggle room when it comes to trades. “That can make the difference for a prime deal, because now we have a retail outlet for these cars,” she said. “That makes us a reasonable front and back profit on units we’d otherwise have to wholesale at a loss.”

Part of the Consator Group of Companies, First Choice Car Care covers eligible vehicles 20 years and newer and have under 150,000 on the odometer when sold. It also offers five years investment and budget protection, and provides 50,000-, 75,000-, and 100,000-mile coverage options.

The First Choice Car Care VSC covers most domestic brands, including orphans and most luxury and import models. For either vehicle class, consumers can choose either a basic plan for powertrain, turbo/supercharger, and four-by-four and all-wheel-drive transfer case components, or the Enhanced plan. The later adds drive axle, air conditioning, electrical, and fuel system protection.

All programs include wear and coverage, towing, rental, roadside assistance, and trip interruption. And coverages may be transferrable to a new owner should the original purchaser sell the covered vehicle.

The First Choice Vehicle Service Contract program is administered by Allegiance Administrators. First Choice Vehicle Service Contracts are backed by Assurant, which has more than $30 billion in assets and is an “A”-rated carrier with A.M. Best.

For more, contact Lloyd Trushel, president of First Choice Car Care, at email hidden; JavaScript is required">email hidden; JavaScript is required

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Fidelis PPM, MaximTrak Announce Integration


SCOTTSDALE, Ariz. — Fidelis PPM, a CU Direct company, announced today that its retention-building prepaid maintenance software is now integrated into MaximTrak Technologies’ F&I platform.

This integration enables F&I departments using the MaximTrak platform to deliver e-contracting functions between systems, providing dealerships with a paperless solution for presenting, validating, and registering Fidelis products.

“Dealers who offer their customers Fidelis PPM-brand prepaid maintenance programs see first-year customer retention rates of 85% and 65% at year three — with significant growth in customer-pay service revenue as well,” says Ryan Williams, president of Fidelis PPM. “Now, dealers using MaximTrak have a proven customer retention and service revenue program that works even more efficiently and conveniently, and more easily measure results.”

Aside from improving customer service and the presentation of Fidelis’ product programs, the integration will provide users with sale-through performance results through MaximTrak’s reporting tools. Additionally, the connection will eliminate data transfer bottlenecks and delays.

“MaximTrak is the leading digital F&I platform and dealers using it to present products to car buyers consistently show increases in [profit per vehicle retailed] and product penetration,” said Jim Maxim Jr., president of MaximTrak. “We’re excited to now have the Fidelis PPM program integrated with this powerful F&I presentation and sales platform.”

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Reynolds Now Offers 30 State-Specific F&I Documents Libraries


DAYTON, OH — The Reynolds and Reynolds Co. announced that Reynolds Document Services has developed 30 state-specific Reynolds LAW brand F&I documents libraries, surpassing the midway point of its goal to create LAW F&I libraries for all 50 states.

Reynolds LAW brand F&I libraries contain a comprehensive suite of standardized F&I documents designed to help dealers manage their compliance risk, streamline F&I processes, and increase customer satisfaction. These libraries are also available in electronics form to help a dealer’s transition to econtracting.

“F&I paperwork can be exacting and demanding both for dealerships and for their customers,” said Jerry Kirwan, senior vice president and general manager of Reynolds Document Services. “The F&I forms in use are often sourced from different vendors, may be outdated, or may have other inconsistencies — all of which can raise compliance risk for dealers and add confusion for dealership personnel and car buyers.”

Reynolds LAW brand F&I documents libraries are available for the following states: Alabama; Arizona; Arkansas; California; Colorado; Hawaii; Idaho; Illinois; Indiana; Kentucky; Louisiana; Maryland; Massachusetts; Michigan; Missouri; Nevada; New Jersey; New Mexico; North Carolina; Ohio; Oregon; Pennsylvania; South Carolina; Tennessee; Texas; Utah; Virginia; Washington; West Virginia; and Wyoming.

Kirwan noted that each state-specific LAW forms library is designed to help dealerships manage compliance risk, streamline F&I processes, increase customer satisfaction and smooth the transition to electronic documents.

“With each state-specific F&I forms library, we’ve built a trusted resource for dealers to better manage all of the forms necessary to complete a deal; better meet federal, state, and city F&I paperwork requirements; and deliver a more consistent, rewarding experience to car buyers at the dealership,” Kirwan said.

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Study: Consumers Want to Buy Big-Ticket Items From Their Smartphones


SAN FRANCISCO — A new study shows that one-third of consumers are open to buying cars from their mobile device. However, the same study showed that 86% of them still want to test-drive the vehicle before purchases.

The study, which surveyed, 1,185 consumers, was conducted by Survata on behalf of Roadster, a three-year-old company that offers that type of service. Using their mobile phone, consumers shop for vehicles on the company’s site, while Roadster brokers the deal with participating dealers once a vehicle is selected. And according to its study, it’s not just shoppers in tech-specific cities who want that type of experience.

“It’s clear from the results of our survey that consumers are open to new ways of shopping for big ticket items,” said Andy Moss, CEO of Roadster. “With Roadster, we have incorporated some of the most cutting-edge ecommerce technologies into car shopping to make car buying as easy as buying anything else online. On Roadster.com and our partner dealer sites, consumers can now find a car they like on their mobile device, purchase it directly with our ecommerce technology, and have it delivered to their doorstep, sometimes even the same day.”

The survey found that men (41%) are more interested in buying cars from their smartphone than women (21%). It also found that consumers with household incomes of more than $150,000 are more likely to transact online.

The survey also showed consumers are willing to buy F&I products from their smartphone, with 31% respondents saying they’d be interested in selecting their “warranty,” and 27% saying they’d be interested in selecting their service plan.

Additionally, 45% of respondents said they wished the auto industry would introduce free delivery. Forty-five percent of respondents said they want free return, while 44% said they wanted fixed pricing.

And consumer who weren’t interested in purchasing big-ticket items from their smartphones said they would reconsider if they knew there were significant savings involved. According to survey results, 43 percent of consumers expected to save $2,000 or more by purchasing a car on their smartphone vs. going to the dealership. Thirty-one percent believed they would asave three to four hours by conducting the transaction online.

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AutoNation’s F&I Operations Posts $1,538 Per-Copy Average for 2015


FORD LAUDERDALE, Fla. – AutoNation’s F&I operations, or what the group refers to as Customer Financial Services, lived above $1,500 in F&I gross profit per vehicle retailed (PVR) in 2015, with the business unit’s full-year revenues rising by $100.5 million from 2014.

The group’s F&I operation’s full-year PVR average was $1,538, up $124 from 2014. For the fourth quarter, the business unit’s PVR average came in at $1,556, up $109 from 2014’s end-of-year quarter.

Total F&I revenue for 2015 increased 13.5% from a year ago to $846.1 million. For the fourth quarter, revenues increased 14.4% from the year-ago period to $210 million.

The nation’s largest dealer group posted full-year revenue of 20.9 million, up 9% from the prior year. Total gross profit was $3.3 billion, up 9% from the year-ago period. Operating income for the full year was $873 million, an increase of 6% over the prior year.

“Our primary assumption for 2016 industry new-vehicle unit sales is above 17 million for the year,” said Mike Jackson, the group’s chairman, CEO and president.

For the fourth quarter 2015, revenues totaled $5.3 billion, up 6% from the year-ago period. Total gross profit was $812 million, up 4% from the year-ago period, while operating income fell 12% to $200 million.

Retail new-vehicle sales for the fourth quarter increased 4% from a year ago to 86,740 units. For the full year, the dealer group bested 2014 sales by more than 21,000 units for a total of 339,080 units sold.

“The fourth quarter industry sales environment was more push than pull, resulting in significant new- and used-vehicle margin declines on a combined basis of $217 per vehicle, which is 11% lower than the fourth quarter of 2014,” Jackson noted. “During the quarter, we experienced particular weakness in premium luxury, which had a significant impact on our fourth quarter financial results.

“We have begun and will continue through the first quarter to take necessary steps to align our cost, inventory and pricing strategy to the current market,” he added.

On a same-store basis, gross profit for variable operations was $450 million in the fourth quarter, down 4% from the year-ago period. Variable gross was $3,350 on a per vehicle retail basis, a decrease of $125 from the prior year, while new and used same-store unit volume was flat compared to the year-ago period.

Additionally, new-vehicle revenue for the fourth quarter was $3 billion, a $61 million increase from a year ago.

Jackson noted that 2015 was a historical year for AutoNation, as the group celebrated the sale of its 10 millionth vehicle. “We implemented our industry-leading recall policy,” he added. “We acquired 51 franchises with approximately $1 billion in annual revenue, and we built our brand and kicked off our drive pink campaign from coast to coast.”

Asked if the auto finance environment will remain a key driver of sales — particularly with a million more off-lease vehicle returning to the market — Jackson responded, “I see absolutely no sign of difficulties in auto finance.”

“I first think on the consumers’ commitment to pay for the car loans, whether it’s lease or finance,” he added. “It’s unwavering. So no alarm bells there.”

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