Tag Archive | "Safe-Guard"

Safe-Guard Appoints Finance & Insurance Leader Scott Ashby as GM of Canada


ATLANTA – Safe-Guard Products International announced that Scott Ashby has joined the company as General Manager of Safe-Guard Canada, Ltd.

“I am pleased to welcome Scott to the Safe-Guard team as General Manager of Canada,” said David Pryor, CMO of Safe-Guard. “His role will be vital to servicing our Canadian clients and their dealers as well supporting the next stages of growth within our company.”

With over 15 years of experience in finance and insurance, automotive product development, operations management, and automotive retail, Ashby’s experience and knowledge will serve the growing Canadian finance and insurance market well. Most recently Ashby was Aftersales Program and Operations Manager for Nissan Motor Corporation and National Manager of Nissan Canada Extended Services, Inc. which offers financial and insurance products to Nissan and Infiniti dealers across Canada.

Safe-Guard Canada has been serving Canadian customers since 2001 and operates a state-of-the-art facility in Mississauga for their call center and operations management and sales training. Safe-Guard Canada supports clients such as Harley-Davidson Financial Services, Honda Financial Services, Mercedes-Benz Financial Services, Nissan Canada Extended Services, Inc., Porsche Financial Services, and North American Automotive Group as well as their dealers across Canada. With continued growth in the Canadian automotive industry, and increased focus from auto dealers on Finance & Insurance (F&I) products, Safe-Guard Canada saw contract volume grow over 70% in 2015 and is poised to support clients with another successful year in 2016.

“We continue to see growth in the Canadian market,” said Pryor. “Our existing clients are adding new products and solutions, dealers are seeing success with branded programs supported by training and sales support, and consumers continue to demand care-free auto protection. We’re excited to support clients and their dealers with a complete finance and insurance solution.”

Posted in Auto Industry NewsComments Off on Safe-Guard Appoints Finance & Insurance Leader Scott Ashby as GM of Canada

Safe-Guard Expands Presence With New Office On West Coast


Atlanta, Ga. – Safe-Guard opened a third office location in Irvine, Calif. to better service clients across the United States and Canada. With recent growth in the automotive industry, an increased focus from auto dealers on F&I products and desire from consumers for complete and care-free auto protection, demand for F&I products is at an all-time high. Established in 1992, Safe-Guard is headquartered in Atlanta and opened an office in Toronto to service Canadian clients in early 2013.

The expansion to Irvine also allows Safe-Guard to grow its training capacity and support West-coast partners in training initiatives through Safe-Guard University. The office includes advanced training facilities and technologies to host corporate, regional and area sales persons. Safe-Guard University and other customized training programs are led by Safe-Guard managers with real world dealer experience.

“We’re very excited about the opening of our Irvine office,” said Randy Barkowitz, CEO. “Client service is an important part of who we are. Having an office in Irvine will allow us to focus on West-coast partners to help them grow their business and create long-term customers. And having a state of the art facility on the west coast will help us expand our training capacity in order to continue to propel our client’s business forward.”

The Safe-Guard Irvine office opened in December 2013.

Posted in Auto Industry NewsComments (0)

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.”

Posted in Product & TechnologyComments (0)

Safe-Guard Announces Two High-Profile Additions To Its Management Team


Atlanta, Ga. – Safe-Guard Products International LLC hired Kaizer Siraj as Chief Information Officer, and named David Pryor to Chief Marketing Officer.

“The addition of Kaizer and David to the Safe-Guard management team represents the beginning of the next phase of the Safe-Guard story. Already the industry leader in customer service, we can now leverage that strength to build our marketing and IT capabilities that will continue to drive growth and excellent service for our partners,” said Randy Barkowitz, CEO, Safe-Guard Products. “Our investment in industry-leading talent is just one more way that Safe-Guard sets itself apart in the F&I industry and allows us to maintain our unrivaled position in the market. The automotive purchase experience has been transformed by the digital revolution, and manufacturers are increasingly focused on customer experience as a differentiator. Safe-Guard is now even better positioned to capitalize on this changing environment.”

Siraj is responsible for overseeing Safe-Guard’s portfolio of technology platforms and the continued development of technology-based product solutions. He brings more than 15 years of leadership experience in information technology, including global implementation, product launches, mobile technology, critical system management, quality assurance, security and application development within the wireless, retail and warranty/insurance industries.

“I am excited to lead Safe-Guard’s expanding investment in technology solutions for our partners. Our industry has often lagged consumer expectations, which have recently been transformed by the capabilities of emerging digital and mobile platforms. I see a tremendous opportunity to bring my 15 years of experience in the telecom and retail industries to Safe-Guard and our clients,” said Siraj.

Pryor will lead Safe-Guard’s marketing relationships with the company’s agent, national retailer and OEM partners. Pryor brings more than 15 years of automotive OEM experience to Safe-Guard. Most recently, he was brand vice president for Jaguar North America, and prior to that, he was the chief marketing officer at Porsche Cars North America. He has served in a variety of roles in the automotive industry including marketing, product development, finance, aftersales and customer relationship management.

“Safe-Guard has an incredibly compelling story that is waiting to be told. As a marketer I couldn’t ask for a better opportunity: A respected brand, great customer service and a strong management team with an overwhelming desire to deliver innovative products and services,” said Pryor. “I look forward to drawing on my 15 years of automotive experience as we continue to lead the industry in delivering solutions to the changing F&I landscape.”

Posted in Auto Industry NewsComments (0)

Safe-Guard Leads the Way to a Two-Plus Finance & Insurance Product Index


ATLANTA – It’s no secret that F&I departments have been heavily relied upon to fill dealerships’ profit gaps. With the current pressures in the industry and more restrictions on rate, getting $1,000 per vehicle retail requires a solid strategy.

While many look to higher-cost products like Vehicle Service Contracts, maintaining a two-plus product index can be the key to getting $1,000 per vehicle.

Luis Garcia, Safe-Guard’s director of training and development, will present concrete ways to improve profits in F&I every hour on the hour in booth 3637N during the 2011 NADA Convention & Expo Feb. 5-7 at the Moscone Center in San Francisco.

Garcia will demonstrate a menu presentation based on five core products, discuss a solid interview process and review the qualities of a provider that can help make every deal a two-plus product deal.

“Safe-Guard has always believed that the delivery is just as important as the products themselves.” Safe-Guard CEO Doug Duncan said. “We lead the industry in providing the training and tools that give our partners the strongest backing for serious profits.”

Posted in Auto Industry NewsComments (0)

Safe-Guard Enters Latin American Markets, Expands Sales Team


ATLANTA — Safe-Guard Products International LLC is expanding into the Mexican and Brazilian markets, and growing its sales team.

Safe-Guard also announced that Marcos Luna Rivera has joined the company as national director, Mexico. As a new country director, he is tasked with both managing operations locally and creating additional expansion opportunities in the Mexican marketplace.

Luna Rivera has experience in both the financial service and insurance brokerage areas, most recently as chief financial officer for GMAC-Mexico.

“Marcos’ experience leading a large automobile finance company as CFO will help us continue to grow our business in numerous directions by leveraging his extensive relationships within our industry,” Orlando Zayas, Safe-Guard’s president, said.

In addition, Safe-Guard is expanding its sales leadership team. Jeffrey M. DeYoung has been named national sales leader, financial services. Safe-Guard is looking to build on its many strong partnerships with financial institutions with the addition of DeYoung.

“With his experience in banking, financial services and automobile F&I sales, Jeff is in a position to make an immediate impact on our partnerships with financial institutions,” Dave Duncan, Safe-Guard’s senior vice president, said.

Posted in Auto Industry NewsComments (0)