Tag Archive | "Michael Tuno"

Compliance Summit Panel to Include F&I Pro, Experts, Editor


LAS VEGAS — Organizers of the upcoming Compliance Summit have announced that a panel dedicated to “Your Responsibilities” will include an award-winning F&I director, two compliance experts and a member of the Auto Dealer Today editorial team. The event will be held Aug. 29–30, 2016, at Paris Las Vegas as part of the annual Industry Summit.

Justin Gasman, finance director at McCaddon Cadillac Buick GMC in Boulder, Colo., and F&I and Showroom’s reigning F&Idol winner, will be joined on the panel by Michael Tuno, founder and president of ARMD Resource Group, and Max Zanan, president of Total Dealer Compliance. Tariq Kamal, managing editor of Auto Dealer Today and contributor to several additional industry publications, will serve as moderator.

“This is exciting,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom. “Tariq and his team bring four distinct perspectives to a challenging subject. I can’t wait to hear what they have to say.”

The panel, “Leadership, Teamwork and Accountability,” will begin at 2:35 p.m. on Monday, Aug. 29. The group is tasked with laying out the important first steps attendees must take to fall in line with government standards and protect F&I profitability.

“This diverse group is the ideal combination for the topic, and they are going to make my job easy,” Kamal said. “We are going to equip every attendee with the information they need to start forming a plan for compliance and sustainable productivity.”

Compliance Summit attendees are also invited to attend any Industry Summit session and sit for the Certified Automotive Compliance Specialist exam, both for no additional charge.

To register for Compliance Summit and the exam, click here. For more information, including sponsorship and exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is requiredor at 727-947-4027.

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F&I Think Tank Adds Top Compliance Experts


TAMPA, Fla. — Organizers of F&I Think Tank, the F&I manager-geared event preceding Dealer Summit 2016 this May, announced that six of the top dealer compliance experts in the industry will be at the Sheraton Tampa Riverwalk Hotel for the preshow event’s “Busting Compliance Myths” panel session. These individuals will field questions from attendees in a 20 Group-like setting, as well as provide an update on key regulatory battles taking place at the federal and state levels.

The panel, which will take the stage at 5 p.m. on Tuesday, May 3, will also take on several long-held beliefs in F&I and offer their take on whether or not they’re legally valid. Examples include the 300% rule (offer 100% of your products to 100% of your customers 100% of the time) and disclosing the base payment on the F&I menu.

“This is going to be a fun session,” said Gregory Arroyo, editorial director of F&I and Showroom and Auto Dealer Today magazines. “Our compliance experts are going to separate fact from fiction when it comes to some of these recommended best practices in the F&I office. They will also take questions from the audience in what promises to be a lively discussion.”

Moderating the panel will be respected compliance and training expert Robert Harkins, who serves as vice president of training for American Guardian Warranty Services Inc. He’s also served as master of ceremonies for a number of industry events, including F&I and Showroom’s annual Industry Summit.

Panelists include David Robertson, executive director of the Association of Finance & Insurance Professionals; Michael Tuno, president and founder of World Class Dealer Services Inc.; Jim Ganther, president of Mosaic Compliance Services; Randy Henrick Esq., associate general counsel for Dealertrack, and Karen Klees, certified consumer credit compliance specialist for EFG Companies.

Tuno is a 20-year veteran of the auto industry and has served as an F&I instructor for the National Automobile Dealers Association since 2007, while Klees was one of the first 100 professionals to earn the National Automotive Finance (NAF) Association’s Certified Consumer Credit Compliance Specialist designation. Henrick, a more than 30-year veteran of banking and consumer financial services, is the author of the annual Dealertrack Compliance Guide, while Ganther began his career as a business attorney and litigator in Washington, D.C., and Tampa, Fla., and is currently a member of the National Association of Dealer Counsel.

“We have the who’s who of dealership compliance,” Arroyo added. “I don’t think there’s another event that can make such a claim.”

F&I Think Tank was created in partnership with Ethical F&I Managers, a more than 5,000-member Facebook group founded by F&I and Showroom’s “Mad” Marv Eleazer. The preshow event is included in the price of a full show pass to Dealer Summit 2016. For more information or to register, click here.

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‘Is It Compliant?’ to Cap Midwest Compliance Summit


CHICAGO — Organizers of Compliance Summit have announced that the Midwest event, which will be held April 20–21, 2015, at the DoubleTree Chicago O’Hare in Rosemont, Ill., will conclude with “Is It Compliant?”, an open-forum discussion of the topics raised in the course of the conference.

“Is It Compliant? proved to be the perfect capstone for our inaugural event in Florida,” said David Gesualdo, show chair and publisher of Auto Dealer Monthly and F&I and Showroom magazines. “Engaging the speakers in an open, friendly environment will provide a last chance for every attendee to make their voice heard and fill in any gaps that may have appeared in the sessions that precede it.”

The discussion will be led by Bob Harkins, director of the AFG Training Academy and the event’s master of ceremonies. He will be joined by featured speakers and panel moderators from prior sessions, including attorneys James Ganther and Terry O’Loughlin of Mosaic Compliance Services and Reynolds and Reynolds, respectively, as well as AFIP’s David Robertson and World Class Dealer Services’ Michael Tuno.

More information about Compliance Summit, including registration and travel information, is available at ComplianceSummit.com. For sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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Tuno to Tackle ‘Your Responsibilities’ at Compliance Summit


CHICAGO — Organizers of Compliance Summit, a series of regional events dedicated to front-end compliance, have announced that agency head Michael Tuno will serve as featured speaker at the Midwest event, which will take place April 20–21, 2015, at the DoubleTree Chicago O’Hare in Rosemont, Ill.

“Michael and his team exemplify the role of the ‘full-service’ agency, which in today’s dealership space, includes front-end compliance,” said David Gesualdo, publisher of Auto Dealer Monthly and F&I and Showroom magazines. “He has succeeded by doing business the right way and we are grateful he has agreed to share his strategies with the dealers in attendance.”

Tuno will present “The Ability to Respond” at 11:40 a.m. on Tuesday, April 21, to lead off the “Your Responsibilities” segment of the agenda. The president of World Class Dealer Services said the current regulatory environment and recent actions demand that dealers be “embedded” in their businesses to respond to inquiries and protect themselves from undue harm.

“The scope of the presentation will be to provide some updates to the legal landscape as well as giving the audience some practical takeaways they can put right to work in their dealerships,” Tuno said. “It will be straight to the point without too much legal doctrine.”

More information about the show, including registration and travel information, is available at ComplianceSummit.com. For sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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WCDS President Michael Tuno Achieves Second Tier of Master Certification


COLLEYVILLE, TEXAS – Michael A. Tuno, founder and president of World Class Dealer Services (WCDS), joined the ranks of a handful of professionals who have advanced to the second round of the Association of Finance & Insurance Professional’s (AFIP’s) master certification program. Tuno first attained master status two years ago when AFIP introduced the top-level curriculum in 2012.

“Compliance has always been at the core of WCDS products and services,” said Tuno. “Master certification helps me provide our dealer clients not only with a better understanding of the rules, but also best practices in the evolving regulatory environment.”

Tuno founded WCDS, based in Quakertown, Pennsylvania, in 2003. The full-service agency provides finance and insurance products and resources to automotive, recreational vehicle, powersport and heavy truck dealers in the mid-Atlantic region.

Before WCDS, Tuno gained 18 years of experience in F&I. He logged six years in retail sales, F&I and sales management; three years in automotive banking; nine years in sales and management with Universal Underwriters Group; and one year as Vice President Franchise Sales with the Guardian Warranty Corporation before launching his own company.

Tuno has contributed to numerous trade publication articles and has been a speaker and panelist at NADA and RVDA national conventions. He was an instructor for F&I with the NADA Automobile Dealer Candidate Academy and currently serves as an instructor for F&I with the NADA American Truck Dealer Candidate Academy.

Tuno holds a Bachelor of Arts degree from Dickinson College, an MBA in Marketing in the Automotive Industry from Temple University, and completed the Executive Management Program at the J.L. Kellogg Graduate School of Management at Northwestern University. He earned his initial AFIP certification in 1996 and his senior certification in 2009.

“Michael Tuno is a leader in the field of F&I,” said David Robertson, AFIP executive director. “It’s fitting that he’s in the first wave of second-tier masters – they are the vanguard of their profession. Their commitment to excellence and ethical conduct embody what it means to be a true professional.”

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Product Offering – The Key to Achieving a Robust PVR


While there are many factors that can impact per vehicle retail (PVR); top agents agree that having a well-rounded array of products and presenting them appropriately is the foundation to achieving a desirable PVR. In the last issue of Agent Entrepreneur, we asked successful agents about their methods for achieving a healthy PVR. They discussed the importance of managing the process through detailed reporting, using data collection, how to develop a working relationship between sales and F&I, and the impact of quality training. They also pointed out a necessary prerequisite to a healthy PVR – offering a wide array of products and being an expert on all of them. They cautioned F&I managers never to view any deal as a throw away deal – even cash and lease purchases now bring the opportunity for profit with all the quality ancillary products that are on the market today. In fact, these agents had so much to say about the impact of product offering on PVR that we decided to make it the sole focus of this article.

Everyone agrees that product offerings should be catered to fit the needs of the customer, but do customers’ needs vary dramatically among dealerships and manufacturers? If so, should PVR results be correlated with the price or type of vehicle? Do savvy agents expect that more products will be sold at some dealerships than others, or is there a basic expectation for what PVR ought to be regardless of other factors? These are some of the questions that we asked top agents to address. Read on and learn their tips for selecting the right product array for high-end, low-end, lease and cash customers – how the products, and presentations differ to best meet the needs of the customer and achieve a most desirable PVR.

Education as a Motivator

Educating the consumer on the coverage that comes with their vehicle, whether new or used, regardless of the manufacturer, can be the perfect segue for the F&I manager to step into the role of a problem solver rather than a sales person. This is a great place to start. “When customers really understand any loss or risks that they may have with their vehicle purchase,” notes Michael Tuno, president, World Class Dealer Services, Inc., “their motivation to ‘buy’ always trumps the F&I managers motivation to ‘sell.’”  Tuno refers to this approach as “loss aversion” and uses it in his menu construct and word tracks when training F&I managers.

Tuno sites paint as the perfect example of a feature, that when fully explained to the buyer, becomes an area where the customer often wants protection. “Every single car today is painted with a water-based paint instead of oil-based paint in manufacturers’ attempt to be environmentally friendly. It’s a softer paint that damages easier. Saltwater and sun both damage paint. There is a whole market segment for that – especially within those high-end buyers. No one I know of wants to drive a Mercedes that’s all pitted and washed out.” Once the customer understands what the paint protection offers, and recognizes the value of the protection, it can be an easy sell.

Menu Selling

The introduction of menu selling has opened the door for many ancillary products that are a key part of achieving a healthy PVR. Mike Conley, CEO, Conley Insurance Group, says that by using a menu to present products, many more products can be offered than if they were to be presented separately. “Lost key coverage, paint and fabric, maintenance contracts, windshield coverage, dent protection, theft protection – the list goes on and on.” Another advantage to menu selling is it gives the ability to bundle products chosen to appeal to a particular buyer’s needs.

Customer satisfaction is another critical element that can be achieved through the F&I product presentation. “Back it down to 1-2 points of reserve, and limit the service contract to a fair and reasonable level,” says Conley, “The additional income can come from selling other products presented with the menu, that will not only increase PVR, but will also provide customers with additional products and protections, and not just a higher payment.”

Cash Deals

Regardless of the type of vehicle or dealership, experienced agents report that they typically expect greater profitability on a finance deal than on a cash deal. While it may seem logical to think that if people have money, they are more apt to buy something (i.e. cash buyers), Randy Crisorio, president and CEO, United Development Systems, Inc. (UDS), reports that 85% of F&I products are sold in a controlled transaction, which would be lease or finance – not cash. “It is easy to say, ‘Would you like your payments to be $385, or $401 with protection?’ But if a guy comes in with cash for a $28,000 vehicle, you’ve got to get him to write another check for $1800 (or whatever the amount is) for a service contract.”

To achieve the target PVR, Glen Tuscan, president, Dealer Commitment Services, emphasizes a consistent focus on those cash customers. He says cash customers are strictly a matter of the F&I person’s attitude. “The approach is no different than a captive finance customer. If the F&I manager stays focused on his offerings consistently with that cash customer, the solid PVR results will come.”

Clearly, appearance and “peace of mind” products such as paint and fabric or roadside assistance offer viable avenues for approaching all cash customers. Older vehicles merit a focus on service contracts while purchasers of new vehicles can be shown the value in an array of appearance products. John Braganini, principal of Great Lakes Companies, pointed out that deductible amounts, length of coverage terms, and the level of coverage can all be adjusted to best meet individual customer needs.

An array of appearance and peace of mind products, similarly to the products often valued by lease customers, are most recommended for cash customers. Among the top of the list for those peace of mind products are identity theft, and credit insurance. Other products with strong appeal to cash customers are theft recovery products and planned maintenance – both of which are also excellent tools for promoting customer retention. Appearance products such as tire and wheel protection, paintless dent removal and paint and fabric protection also are products with strong appeal to cash customers.

Lease Deals

Historically, finance deals may have proven to be the most profitable, but the rapidly growing number of leases has had a big effect on product offerings at higher-end dealerships. According to Crisorio, 2/3 of new vehicles are now leased in high end stores, rather than purchased. And dealerships are feeling the effect this has on PVR. “If one dealership sells 100 vehicles and leased 40, and another dealership sells 100 and leased five, their PVR is not going to line up because of the lease income. You can’t compare the two. The guy who delivered 40 leases would be in trouble – he is going to look terrible.”

Many agents agree; the recent surge in leasing has everyone reevaluating how lease deals are approached in the F&I office. However, today more than ever, they are beginning to be viewed as a ripe opportunity for profit. The days of viewing lease and cash transactions as “throw-away” deals are quickly becoming a thing of the past.

When asked to compare the PVR on a lease versus finance deal, John Peterson, former president, The Oak Group, pointed out that it might be more difficult to attain higher PVR on lease vehicles, but with today’s offering of ancillary products, he says it is becoming easier now than it ever was in the past.

When you are in tune with the customers’ needs and buying style, agents agree that you can have a very productive conversation with them about products – even on a lease. Since PVR is an average, the higher numbers achieved on other vehicle sales can even out the lower PVR from leased vehicles. Tuno says he looks at aligning lease vehicles with products such as lease wear and tear, key replacement, chemicals, tire and wheel, and theft. “The lease customer is the payment buyer of yester-year. We are sensitive to that and we don’t expect that the PVR on a lease vehicle is going to be 50%. Remember, PVR is an average. If it’s a big leasing store, we like to try to make sure they stay at a floor of $750 per vehicle lease, and make up the difference with new non-leases and used cars.”

Since most leases are for three years, service contracts can be a tough sale. Many agents mentioned aligning lease customers with products such as lease wear and tear, chemicals, and key replacement. It is wise to point out to customers that appearance products can often prevent them from having to pay for damages at the end of their lease by protecting the vehicle through the term of the lease.

A lease deal can be impacted by the allowances of the lease institution – therefore, the target for lease deals may vary by manufacturer. Crisorio says that while a common target for lease and fleet deals is $1000, he says the potential impact of a lease institution could be as significant as, “Mercedes might be $2200 and Nissan could be $350.”

From Luxury to Low-End

Braganini, says the only difference between a buy-here-pay-here customer and a Bentley purchaser is the customer’s needs awareness. “The people in that higher income bracket, driving upscale cars, are no different than anyone else. They buy the same way – they buy things they see value in . . . You have to carefully look at the composition of your customer base and build an F&I department around that. If you try to sell the same products to Ford buyers as you do to Mercedes buyers, you just aren’t going to get the same results.”

However, Glen Tuscan pointed out that European imports do have a real effect on PVR. He says a penetration rate of 30% for service contracts can be expected if you include what he refers to as “the high-end European lines” – BMWs, Audis, and Mercedes. “But if you are talking strictly domestic and Asian imports, 40-50% is a very reasonable number to expect for F&I service contract acceptance rates.”

Lower-end dealerships have a much higher penetration of service contracts overall than higher-end dealerships. “In lower end dealerships, VSCs are very important, without a doubt, ” says Peterson. He says that the average number of VSCs that are sold should be 50% or better if a store is operating effectively.

Crisorio says a high-end customer might be more prone to buy tire and wheel because the cost of replacement is so high, but so is the cost of the protection. The lower-end customer might not be as concerned about this type of coverage. Crisorio says tire and wheel is his biggest selling product at high-end dealerships and service contracts dominate at the lower-end dealerships.

John Braganini believes the demographics and franchise of the dealership should drive the menu. “A franchised dealership selling both new and used vehicles will need to select products and coverage formats that match both the mechanical, functionality, and operating conditions of the vehicles they sell. Trucks and SUVs call for different coverage than sedans and smaller vehicles. The income, trade cycle, driving habits, and lender metrics will then drive the pricing and selection of the products that are selected for the menu.”

Braganini included the following list of products recommended specifically for truck buyers, as opposed to car buyers:

  1. Commercial use surcharged products
  2. Rips, tears, and burns coverage on interior protection
  3. Electronic corrosion module
  4. Consequential damage coverage for the extended service agreement
  5. Hydrophobic windshield protection
  6. Curb & cosmetic coverage on tire & wheel

Tuno says the marketplace is rich with great products that offer all customers real value, regardless of their vehicle type or if it is new or used. “Typically in the ‘luxury’ marketplace, with longer factory warranties and shorter ownership cycles, appearance and convenience-type products are more valuable to the customer.” This is particularly true when a manufacturer, such as BMW, includes the cost of maintenance as part of their lease. When this is the case, Tuno says that there is nothing left to offer except for those appearance and convenience type products. He suggests: cosmetic wheel repair, windshield protection, key replacement, paint protection, paintless dent repair, pre-paid maintenance, tire and wheel, and even biweekly payments.

Braganini says drilling into the demographics of a store’s customer base allows him to put together a product portfolio that makes sense to those customers. “You can pull 500 dealer files from a dealership. You can’t use the information specifically, but you can look at where they live, where they work and their credit application profiles. I want to see where they put their car at night, what kind of weather they are driving in, what kind of roads they are on, how far they are driving to work, and what the prime rate is in any particular area. The information is all there. You can look at the density and location of the car washes and various detailing opportunities people have. When you are done, you can put together a pretty good story for the consumer.”

More traditional products such as VSC, GAP, and anti-theft do have their place at “luxury” stores, added Tuno, but he pointed out that they often fit better in a “non-luxury” store – where the demographics of the franchise better support those products. Buyers at “non-luxury” stores typically do not have the financial resources of luxury car buyers, and a costly mechanical problem could be a major financial burden. For this reason, these customers often find the peace of mind coverage of a service contract to be especially attractive.

The bottom line in adapting your product offering is to understand the customer and cater products to their unique needs. Higher-end customers with more economic or buying power will see value in high quality appearance products. Tuno noted that, “no one wants to drive an $80,000 Mercedes that’s dented, scratched and has beat up wheels or tires.” He says the “bling factor” has to be accounted for, as does the customer’s buying style. “You have to recognize when a customer really wants to have that arrival factor – ‘I’ve made it, I am successful, and now I’m getting my Mercedes.’ People don’t buy Mercedes because they don’t want you to know they’ve arrived.”

Braganini emphasizes the importance of finding the right products. He says a lot of agents either don’t take the time to do that, or they don’t have the capability. Instead, they end up trying to fit the customer into their plan instead of creating a plan designed to best meet the customer’s needs. And for dealers who are doing business with a large national company, those options to customize product offerings often do not even exist. Customizing the product offering is key. “By taking out a clean sheet of paper and designing a program specifically for that store based on its demographics and types of vehicles, we are able to offer a product mix with specific appeal for that group of customer’s needs.” The result? Achieving the PVR that all agents strive for, a happy customer, and at the end of the day, the satisfaction of a job well done.

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