Tag Archive | "United Car Care"

Tom O’Neil to Lead Coaching & Development Panel at Agent Summit


LAS VEGAS — Agency principal Tom O’Neil will serve as moderator for a panel devoted to coaching and F&I development at Agent Summit, organizers announced. The event will be held May 9–11, 2016, at the Venetian Palazzo Las Vegas.

The panel, “Building a Team Theme for Prosperity,” will begin at 4:00 p.m. on Tuesday, April 10. O’Neil and his team will discuss how the installation of a new agency, F&I process and product suite can be derailed by a loss of focus and loyalty to former providers at the dealership level.

“How does an agent earn absolute, unconditional buy-in from a new client?” asked David Gesualdo, show chair and publisher of Agent Entrepreneur and F&I and Showroom. “It’s an important topic and one that I applaud Tom and his panel for tackling head-on.”

O’Neil is the founder and executive manager of O’Neil Financial Services Agency in Westerville, Ohio. He will be joined by panelists Jimmy Atkinson of AUL Corp., John Kane of Empire Dealer Services, Arkansas F&I’s Lewis Matthews Jr. and John Vecchioni of United Car Care Inc. (UCC).

“Getting the dealer to sign up is only the first step in a long-term F&I relationship. The real work is the ongoing coaching and development of each player, manager and the owner of each dealership,” O’Neil said. “If you cannot coach and develop every member of the team to buy in and execute your plan, the F&I numbers will not be there and you will not be there!”

Registration for Agent Summit is now open at the event’s website as well as by phone, fax and email. Attendees who register by April 4 will enjoy a $100 discount.

To inquire about sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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Meet the Trainer: John Vecchioni


Agent Entrepreneur met with John Vecchioni, National Sales Director and Director of Education at United Car Care, to get an in depth look at his approach to training. Learn how he got started in the business, the area he focuses on most in his training and his top three tips for success.

How did you get your start in the auto industry (background/education) and how / why did you specialize as a trainer?

I got my start in the retail automotive industry as a result of a lifestyle and geographic change. I was in the securities and insurance business and lost my partner. We sold the business and moved to Washington. While I was purchasing a vehicle I was approached by the General Manager. After a short a conversation I was offered a sales job.

Because of my sales background I found that selling cars was fun and people would get excited about a new purchase. After a short time I was promoted to finance. I discovered that if sales didn’t happen I would have no opportunity. That’s when I began to close sales and train sales people to close business. It was essential that we increase sales so I could have opportunity in the finance office.

I was promoted to sales management and determined that everyone needs everyday training and support to be successful. Coaching is an everyday thing and results are indicative to time invested. That’s how I got involved in training. It was a necessity to be successful from a management position. The next promotion was to General Manager responsible for three locations. When responsibility encompasses three separate addresses, training to a consistent process duplicated in all the stores, becomes very important.

In 2004 I left the retail business to explore different opportunities. Finding United Car Care allowed me to be involved in all the things I enjoy professionally. I was able to develop business for United Car Care and train professionals to assist them in achieving their goals.

What areas in F&I do you focus on with your training?

Discovery- Everything happens in discovery.

Why should an agent call you for a training assignment?

I indulge in the discovery part of the sales process. Only there will you find the buyer’s real needs (hot buttons) as to why they would ever have a legitimate reason for purchasing your products. I teach “Logical Conversational Selling,” and only when it makes perfect sense to the customer will a sale occur. It always makes sense when we use their words and phrases when discussing protective products.

What are the top three messages you try to give at each of your training sessions?

  1. Discover the need- Why would they have a need to do business with you or purchase any of your products?
  2. When presenting, use the customer’s words on the features and benefits they perceive as value in the vehicle they are purchasing. Match your protective products to their words. Ask questions that help impact your presentation. Logical questions revolve around asking, “Who, What, Where, When, Why, How and Did.”
  3. Use Trial Close Questions as often as possible. Have the customer engaged in conversation with you and ensure that you both are on the same page.

What changes in the industry do you foresee that will impact your training the most over the next few years?

Non-Compliant Dealers could force the industry to adjust to fixed pricing on finance products. With the advent of CFPB and the amount other Regulators are policing the business, the possibility of fixing prices could impact sales training as we know it today.

Tell us about yourself and the kind of activities, hobbies, and interests you pursue outside of training.

I enjoy the serenity and happiness of my family. My wife and I have three grown and married children. We are blessed with four wonderful grandchildren. My priority is and always has been spending time with family. I enjoy working with sales people and being involved in their success. I enjoy gardening, golfing and bike riding.

 Is there anything else you would like to add?

Training requires more than just teaching how to sell a product. It involves instilling confidence in the words and product that the sales person uses. It requires a coaching philosophy to evolve and develop the sales person to believe and reach their goals.

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Industry Trends for 2015


With the recession now in the rearview mirror, the automotive industry appears to be continuing its upward climb. Car sales are at a steady high and vehicle production was still on the rise at the end of 2014. Those who were forced to tighten their belts to survive some of the economy’s worst days are now reaping the benefits and flourishing in today’s market.

AE Magazine spoke with 20 of the industry’s top executives about trends they will be watching in 2015 ­– both in the automotive industry and specifically in F&I. They shared their thoughts and predictions about the economy, products and technology, F&I operations, and the growing impact of Millennials on the auto industry. Read on to learn what they had to say.

The Economy

There are a few shared views among our executives; at the top of that list is the 2015 economy. Some have concerns about the possibility of rising interest rates in the third and fourth quarter, but to one degree or another; most are optimistic about the 2015 outlook. The 2015 economy is generally expected to be robust, following on from the strong momentum of the fourth quarter of 2014.

Kelly Price, president, National Automotive Experts, says, “The major indexes that we pay attention to are oil prices, housing (new construction), interest rates, Dow and NASDQ; all of these lead to more relaxed consumer spending. Year-over-year growth is anticipated as all signs point to a strong and sustainable 2015. Assuming all of this stays positive, the auto industry should follow suit and have a strong year.”

Garret Lacour, CEO, RoadVantage, also expects the economy to continue improving ­– driven by job creation, increased wages and lower fuel costs. “These factors will drive more consumers to showrooms. Several brands set new sales records in 2014, and that momentum will continue into 2015.”

Jerry Biller, president, EcoProProducts, believes all indications point towards a solid 2015 in both the financial and the automotive sector. Mentioning the decrease in unemployment, Biller expects 2015 to be a record year for new and used automotive sales, with more sales transactions this year than ever before.

Oil defines this year’s economy according to Steve Rosenvall, CEO, Alpha Warranty Services Inc. “The economy is driven in large part by natural resources. It’s important to keep an eye on these issues as they arise. Oil and the auto industry are attached at the hip. The economy is seeing some good gains and will continue to through 2015. Lending institutions are continuing to lend money and they are getting creative to help many afford the vehicle of their choice. Many large banks and local banks are posting some of the best gains they have seen in years. “

Bill Gorra, president and CEO, Simoniz USA, Inc., is also among the optimists. He believes the table is set for a prosperous 2015, due to factors such as gas prices, little or no inflation, low interest rates, historical market highs, and record car sales in 2014. He says the stars are aligned for the automotive industry to have a great year. “There should be ample inventory with a wide spectrum of alternatives for the consumer. I believe there is still some ‘pent up demand’ and a lot of older cars on the road that need to be replaced.”

With the increasing availability of credit, Scott Karchunas, president, Protective Asset Protection, expects modest growth in automotive and GDP growth at or about 3%. “If interest rates were to rise modestly in 2015, any negative impact should be minor and potentially offset by the benefits of higher rates to savers.” Additionally, he sites a strengthening economy and labor market combined with lower fuel prices, a low interest rate environment and increasing credit availability as signs that the automotive industry will have another year of modest growth ahead.

Barring any major geopolitical upheaval or a premature monetary response from the Fed, John Luckett, senior vice president of sales and marketing, The Warranty Group, also expects to see 3% growth. “This supports NADA’s forecast of 16.94 million new cars and new trucks to be purchased or leased in 2015. This forecast is based on an economy that has continued low interest rates, rising employment and wages as well as lower gasoline prices.”

Rising Interest Rates

Those with concerns about what the 2015 economy holds cited rising interest rates, international turmoil, and a slowing stock market.

Should the Fed raise interest rates mid-year as it has suggested, Robert Steenbergh, CEO, US Equity Advantage, LLC, believes we could see a general slowdown in the economy; less of a bull market, and an overall wait-and-see approach in the near term from both businesses and consumers. “Automotive will follow suit. With interest rates exceedingly low, consumers will want to buy now before the anticipated mid-year rate increase. How much of a drawback that has on auto sales will depend on how high interest rates go and the total impact it has on the consumer’s overall budget, since rates affect everything from housing and credit to student loans.”

Also on the more cautions side, Tony Wanderon, CEO, National Auto Care, sees the US economy in 2015 having some challenges. “From a growth perspective, I see good results for domestic companies who have very little or no distribution overseas. With the recent strength of the dollar, exports will be a challenge and profits will drop as well. For companies importing into the US, such as Toyota, I see some big profits and aggressive incentives to increase market share. From the energy side, what goes around comes around. I could see gas getting below $1.50 a gallon. That will drive pick-up and SUV sales, then a rapid rise in oil and gas pricing would put pressure on disposable income and drive residuals down dramatically. If you combine that with the return of aggressive lending and the return of normal interest rates, we could see some real pressure on the industry and overall economy in the third to fourth quarter of the year.”

Chris Kerby, president of sales and marketing, Innovative Aftermarket Systems (IAS), thinks 2015 will start as a stellar year, but also has some concerns. “With low fuel prices, turmoil in the Middle East and so many countries like Russia and China going into recession, I think you are going to see some pressures that will affect the economy in many ways. One thing is certain – interest rates are going to go up and in turn, the stock market will slow.

“From an F&I/dealership perspective,” Kerby continued, “I think you will see changes. When times are good, dealers can get loose and experiment in certain areas. F&I is running historically high and not for everyone, but for many, it is not because of their skills. It is because the average carry is the longest it has ever been – finance terms are the longest they have ever been and rates are low. That all changes when the market slows down and interest rates go up. It will be a different ballgame when rates get above 5%. When interest rates go up, what we know as the highest F&I profitability in the history of the car business, as far as income per retail, will be significantly affected.”

But according to Jim Smith, CEO, SouthwestRe, the industry is nearly back to “the good times” of 2000 when there were 17.0 million in sales. Smith pointed out that many businesses were forced to streamline their operations in order to survive the leaner times of years past. The businesses that survived those lean years are now reaping the benefits of their improved efficiency and the elimination of excess spending. And Smith says they are stronger now because of it.

TRENDS TO WATCH:

There are many trends our executives will be watching this year. From trade-ins to technology, and consolidation to the CFPB, there is no doubt there will be a lot worth keeping tabs on in 2015.

Tony Wanderon, CEO, National Auto Care, says, “We could see pressure on margins from start-ups looking to become disruptors in the auto-lending arena. I could definitely see a major lender or credit union put a big push on going direct to the consumer. I think dealers and agents will finally say enough is enough and stop doing business with companies who directly compete against them, such as the recent trends of F&I providers selling cars, refinancing or directly selling vehicle service contracts to consumers.”

Among the trends Steve Amos, president and CEO, Gulf State Financial Services (GSFS), will be watching “is the possibility of selling F&I products on dealer websites. There are dealers experimenting with this and having some success. The key to this possible new process will be to identify who will be selling F&I products and make sure they are compliant and know the benefits of the products.”

The Return of the SUV

Bolstered by the 2015 Ford F-150 and GM’s reentry into the small truck market, Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., expects to see truck sales grow at a faster pace than automobile sales. He predicts domestic growth will outpace foreign competitors, but only slightly. “The industry leaders, both foreign and domestic, finished 2014 strong and will continue that momentum into 2015.”

John Vecchioni, national sales director, United Car Care, is looking forward to wonderful opportunities in the year ahead. “With the large drop in oil prices, I think we will see more SUVS and trucks because people won’t be as concerned about vehicle operation costs as fuel prices decline. Smaller vehicles will see a downturn in sales.”

Vecchioni predicts the increase of trucks and SUVs in the marketplace will result in a demand for customized products for these vehicles. “These type of vehicles are used differently to smaller, commuter cars; there is much more wear and tear, they have four wheel drive, and new electronics.” He expects to see vehicle service contracts (VSCs) tailor-made to meet the rougher demands of these vehicles.

John Luckett, senior vice president of sales and marketing, The Warranty Group, expects increased competition in the pickup truck segment as well as the new powertrain combinations being brought to the forefront by manufactures. He thinks that this trend, along with a few others, will lend itself to new product development, and training and underwriting reviews of the products and processes, which are currently being offered in the finance office.

But despite the current price of oil and a corresponding up-tick in truck/SUV sales, Jay Lighter, president, Nitrofill, says, “The quest for fuel efficiency will continue with a growing emphasis on electrics. As for F&I, I think we will continue to see growth in paperless processes and menu driven sales.”

Leasing and Trade-Ins

The explosion of leased vehicles has been on everyone’s radar. With attractive lease terms and prices, the market appeal for leases is expected to increase even further in 2015. Many of the executives we spoke with will be watching this segment of the market.

Bill Gorra, president and CEO, Simoniz USA, Inc., predicts the upward trend in leasing will continue in 2015. “Some experts predict as much as 30% of new car sales will be through leasing. This presents both a challenge and an opportunity. For instance some traditional F&I products may be short circuited by leasing, but products that address things like end of lease charge backs will be well received.”

Leasing is a trend Kelly Price, president, National Automotive Experts, is closely monitoring. “We anticipate it will continue to be strong across the country. The captives have strong lease programs right now – and we do not anticipate this changing in 2015. Leasing is very attractive to the younger (Millennial) buyer because of the quick turn and hassle free ownership, along with the lower payment point.”

“We all know that there is still a good deal of pent up demand when you consider the average age of a vehicle in the US,” noted Dave Duncan, president, Safe-Guard Products, “but there are other variables that will aid in growth for 2015. Leasing is back to pre-financial crisis levels and in 2015 we will see the early part of the wave of lease returns that will take place for the next few years. Leasing will continue to be strong in 2015, so any protection product that speaks to the needs of those customers will see greater acceptance. Lease wear and tear, tire and wheel protection, some bundled programs, and pre-paid maintenance will be the biggest winners.

With regard to trade-ins, as these older cars and leased vehicles return to the market, they may present some challenges in the financing department. Tim Brugh, president, American Auto Guardian, Inc. (AAGI), says, “As used car values continue to decrease, it will increase the difficultly of an F&I department’s ability to obtain a consumer loan. Customers trading their vehicles in will have less equity in those trade-ins, which means the F&I department will need to work much harder to get those loans approved.”

Dealer Consolidation:

As the activity of private equity companies in the auto and F&I industries increases, so does the trend of the big becoming even bigger.

Garret Lacour, CEO, RoadVantage, predicts the trend toward consolidation will continue and will be an interesting one to watch in 2015, as will the increased focus on F&I as a profit center for the dealership. “This, coupled with the CFPB’s ongoing presence, will make both training and compliance more important than ever.”

Jimmy Atkinson, COO, AUL Corporation, believes there will be some interaction worth watching between franchise dealers and independents regarding used vehicle inventories, sales and values. “I think it will be interesting to see how aggressive the larger franchise groups, which are currently in acquisition mode, become in 2015.”

Processes in F&I:

“We need processes that create efficiencies and avoid redundancies by allowing the front end to pick up more of the administrative duties.” Notes Chris Kerby, president of sales and marketing, IAS, “Using technology will be critical in the process to eliminate waiting. We are proactive with eliminating the manual input of data whenever possible. State regulations and lenders stand in the way for a lot of us, but overall, the industry is getting a lot more efficient at eliminating paper through eSignature and eContracting.”

Jimmy Atkinson, COO, AUL Corporation, noted that F&I processes continue to be more streamlined in order to shorten the transaction time in F&I. “Technology can help with this as well as a strong training program to make more succinct and prepared presentations. F&I managers who ‘wing it’ take longer and achieve poor results when compared to someone who develops the skills needed with today’s customers.” Atkinson says technology should complement the process and enhance the presentation – but it can’t replace the holes in a lousy F&I presentation.

Garret Lacour, CEO, RoadVantage, predicts the ongoing presence of the CFPB and FTC will continue to put the spotlight on dealership processes in 2015. “Dealerships need to have a Compliance Management System (CMS) in place, and a big part of that will be processes: formalized documentation of policy management, training, complaint resolution and compliance audits. In January 2015, RoadVantage launched a CMS specifically to help dealerships address and be prepared for what’s coming.”

Technology:

Another trend on the mind of many executives is the expanding reliance on technology as it relates to all aspects of the automotive industry – from the design and manufacture of the vehicle to the retail sale and F&I presentation.

“Technology is evolving quickly and traditional manufacturers are turning to technology companies to design and develop center-stack interfaces for the vehicles,” says Scott Karchunas, president, Protective Asset Protection, “Manufacturers are shifting from designers and developers of these technologies to thoughtful integrators of these technologies. This trend may speed up the evolution to more autonomous, safe, and productive driving. Also, technology is continuing to change the way cars are retailed – beginning with the lead generation process and continuing with a search for a more consumer-friendly and efficient sales process.”

“Technology can be difficult and ‘scary’ because of the unknown,” says Tim Brugh, president, AAGI, “I don’t care who you are, if technology is not your chosen field of expertise you’re going to be hesitant to replace the process you have in place today. I do think that the hesitation is diminishing, with more and more integration for rating, printing and remitting of the contracts between the websites, menu companies and direct ingratiation to the DMS. It has become less of a scary thing to make that change. It’s really about educating the dealership about the time savings and the simplicity of an electronic transaction. Taking that fear out of the process!”

Garret Lacour, CEO, RoadVantage, pointed out the traditional conservative approach of dealerships, when it comes to adopting the advancements offered by new technology, such as online sales, eContracting and online claims adjudication. He says the growing trend to embrace the online customer experience, due in part to the influx of Millennials, will require dealerships to respond. And, as vehicles become more infused with technology, he predicts the F&I offering will evolve to match it.

Kelly Price, president, National Automotive Experts, sees more technology, such as menus, eBusiness, and product presentations in 2015 as a result of better training, more availability and lessoning reluctance over time. “With increasing pressure from the CFPB and other regulators, F&I offices will be forced to adopt more technology to protect the consumer as well as the dealership. Additionally, more buyers demand more efficient, transparent and friendly F&I transactions.”

Dave Duncan, president, Safe-Guard Products, reports seeing increases in vehicle service contract penetration across the industry as technology offerings in vehicles continue to grow. “The key driver seems to be the message to the consumer that technology on their vehicle can be very expensive to replace or repair. It doesn’t require a drivetrain claim anymore to be in the thousands of dollars. F&I managers are doing a much better job illustrating this fact to the customer.”

No doubt, the role played by the Internet and advances in technology will continue to evolve and impact the whole buying and selling landscape. Jim Smith, CEO, SouthwestRe, says this will be especially significant in the F&I department, as the average customer becomes more knowledgeable. “This makes it that much more important for F&I to ‘stay up with the times.’ The days of customers reviewing brochures are being replaced by customers researching products online. As the world shrinks, consumers will expect things much faster therefore it is up to the providers to be able to satisfy these demands and the Internet and technology is the most efficient way.”

Mark Mishler, CEO, Interstate National Corporation, thinks technology will continue to revolutionize the way that dealers interact with finance companies, the consumer and their product providers. “Dealers need to continue to look at ways to streamline their operations with the goal of having a fully automated front-to-back system in their dealership. This would include everything from desking to DMS integration to the menus and eContracting for both the financing of the car and products, to eContracting for service contracts and ancillary products.”

Robert Steenbergh, CEO, US Equity Advantage, LLC, anticipates a burst of activity in technology, but says it is difficult to predict how successful it will be. “I expect continued exploration of tablet-based technologies, customer self-service approaches (with and without F&I personnel assistance), and an attempt to move F&I online. The success of these approaches will depend on the level of PVR profits they produce.”

Matt Croak, president, Wise F&I, also expects the growing trend of online contracting and remittance to continue expansion throughout 2015. He sees technology as a means to improve the customer experience, by “utilizing online resources to provide better customer support.”

“There are dealers experimenting with selling F&I products on dealer websites and having some success,” Steve Amos, president and CEO, GSFS, notes, “The key to this possible new process will be identifying who will be selling F&I products and ensuring they are compliant, and that they know the benefits of the products.”

Technology is streamlining many businesses’ operations through the offering of apps for smart phones and tablets. Jerry Biller, president, EcoProProducts, started the new year with the launch of an app tying their warranties to a service drive VIN scan using an iPhone camera. It is available to both consumers and dealers. Biller says the app makes the claims process easier and faster for both the customer and the dealer by prepopulating warranty data.

Tony Wanderon, CEO, National Auto Care, says the direction and the impact of technology in F&I is a hard call. “Most technology in the F&I office is controlled by a few dominant providers. I could see someone making a hard push at the direct-to-consumer market with a dynamic and aggressive online solution. If you can now pay with a cell phone, why not have all of your preapproved auto loans done that way as well?”

Compliance and the CFPB:

A significant driving factor for the increased use of technology is the CFPB’s continued encroachment into the F&I office. Technology today offers a variety of elegant solutions for protecting customers’ personal data and for keeping dealers’ operations secure and efficient. Many in the automotive industry, especially those in F&I, will be on the look out for the regulators next move.

Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., says, “Compliance methodologies and practices will continue to be a hot topic for all providers and dealers. The compliance experts seem to believe that there very well may be a trend towards standardized, non-discriminatory pricing on all F&I-type products. This year will likely see most industry providers, including lenders and product and service contract providers, continuing to develop compliance processes and pricing strategies to ensure compliance while increasing dealer profits.”

2015 will continue to be all about compliance and the reach of the CFPB according to Robert Steenbergh, CEO, US Equity Advantage, LLC. He would like to see an initiative from within the industry to work with the CFPB so that everyone clearly understands the rules going forward. “This includes collaborative input on the development and scope of these new rules as we understand our business better than anyone else. Otherwise, this increasingly antagonistic ‘us versus them’ mentality will not end. The CFPB does not have to be an adversary when it comes to treating consumers fairly. Conversely, the CFPB should operate more transparently when it comes to dealing fairly with our industry.”

Jimmy Atkinson, COO, AUL Corporation, says he too, will be closely watching as the CFPB progresses in their march on F&I. “It reinforces the need for transparency in our F&I processes and the need for developing a compliance program that reinforces an atmosphere of integrity in our stores.”

With the CFPB’s continued focus seemingly set on dealer reserve, Dave Duncan, president, Safe-Guard Products, says the current model has come under their scrutiny. “The end result could very well produce a reduction in fees to the dealer. Some people are concerned that the CFPB’s next focus will be on F&I products. That would not be a complete surprise. But, if you are a dealer who demands consistent processes that are fully transparent to the consumer at fair prices, you should see an increase in product sales. Keep in mind that there are many perils of ownership of an automobile and F&I protection products help consumers save money, offer them many conveniences and may even contribute to increased safety and security. Many people want to have this coverage and being able to pay for these protection products within the framework of a loan or lease makes them more affordable to the majority of consumers.”

Kelly Price, president, National Automotive Experts, says it is critical for dealers to pay attention to how they handle every single transaction. “Whether it is a transaction dealing with a lender, which menu system they work with, or how an F&I manager presents the products, they must pay attention every step of the way to ensure that they aren’t the next story in Automotive News. Now is the time to look at and refine those processes that will protect the dealership, the F&I department and the profits that come with it.”

Hot Products

It is no surprise that VSCs and GAP are generally expected to hold their spot as the mainstays in F&I. There are, however, a growing number of products that our panel of executives will be watching this year. Unique products, bundled products, and products geared especially for lease and cash customers are on the rise and expected to experience substantial growth, as are products that create loyalty, such as prepaid maintenance.

“Historically,” says Jerry Biller, president, EcoProProducts, “dealers have been comfortable selling the same products they have been selling, but in the last few years new products have been extremely well embraced, indicating a trend in increased desire to have innovative products for the consumer.”

Chris Kerby, president of sales and marketing, IAS, anticipates that any products that add to owner loyalty will be big sellers in 2015. “Maintenance programs, lease wear and tear – anything that hedges depreciation and helps the vehicle maintain its value will be a hot product.”

Jay Lighter, president, Nitrofill, said they are looking for an expansion of products that provide dealers with residual opportunities in addition to a profit earned at the time of the vehicle sale. “In other words, more sophisticated products that marry F&I solutions to service drive and other departmental needs.”

Tim Brugh, president, AAGI, predicts things will be “back to the basics” in the F&I office. “I think 2015 will be all about simplifying the delivery process in F&I. Keeping the number of products to a minimum of VSC, GAP, a form of tire and wheel combo, and one other product that the dealer is most interested in selling. It’s not about how many products we can throw at the consumers but about the transparency of those products. The F&I team can say, ‘Here are the products we believe in at our dealership and here are the prices for these products.’ Consumers have technology at their fingertips, and they know what things cost before and during the sale process. Transparency is an absolute necessity.”

Kelly Price, president, National Automotive Experts, says that while traditional F&I products such as VSCs and GAP protection will remain strong, she expects products that fit the increasing lease trends will be great sellers this year. “Short term service contracts that appeal to lease customers and ancillary products that fit cash and lease transactions will be the product focus for 2015. Products such as our new Shortfall Deposit Discount and Depreciation program are excellent for lease and cash buyers. In addition, appearance protection packages (paint and fabric, windshield, dent and ding) as well as maintenance programs are excellent for both the dealer and the customer. Maintenance ties the customer to the selling dealer for routine maintenance. This is critical to capturing the next vehicle transaction down the road.”

“With the increased accessibility relative to lending,” Matt Croak, president, Wise F&I, predicts, “GAP will continue to play a primary role in most automotive sales that are financed. Appearance care service contracts will provide increased value to the product mix delivered in the F&I office.”

Jim Smith, CEO, SouthwestRe, expects customer loyalty programs to continue to gain support in dealerships, and products that fit in those programs will also gain traction. These are products such as limited and lifetime warranties, prepaid maintenance and appearance and theft protection products – all of which can be incorporated into customer loyalty programs.

Smith recommends F&I departments consider products to complement theft protection such as key replacement. “Especially with the changes in vehicle technology, key replacement is a lot different and more costly than when you had to just stop and get your key duplicated at the local hardware store.”

Scott Karchunas, president, Protective Asset Protection, believes thoughtful, customer-centric products with dealership retention properties will continue to make sense for dealers and consumers. “The service contract will lead the way. However, dealers and consumers are going to look for updated coverages, which integrate the addition of new in-vehicle technology, powertrain, and safety systems. Product bundles will likely continue to grow as dealers look to increase opportunities for customer retention and revenue both at the time of the sale and over the longer term. Also, GAP will continue to be a staple product for the F&I office.”

“Consumers want peace of mind on many levels,” says Steve Rosenvall, CEO, Alpha Warranty Services Inc., “and now they can afford it. With high tech vehicles becoming a standard, a VSC with better high-tech coverage and array of different terms is a must. It’s important to continue catering to these high-tech buying habits and arm the F&I office with the services and products customers’ desire. New technology offered in vehicles will drive the consumer to want protection from these potentially expensive failures. I see a greater desire to cover high-tech vehicle add-ons such as wi-fi devices, Bluetooth technology, infotainment systems, gaming units, etc.  GAP and ancillary bundles are also on the rise and I expect that trend to continue.”

Millennial Shoppers

Millennial shoppers and employees are definitely making their mark in automotive. As the largest generation in the US, Millennials represent around one third of the entire US population. They are the first generation to have access to the Internet in their earliest years of life and are the most culturally diverse and educated generation in history. With their tech-savvy research skills, the generation that didn’t know life before the Internet is causing the automotive industry to rethink and revamp the buying and selling process. Described as impatient, well educated, and technical, Millennials are a leading factor in the push for increased technology and the use of social media when it comes to car sales.

Jimmy Atkinson, COO, AUL Corporation, describes them as having less patience with sales pitches and being more prepared when they enter the dealership. His recommendation for both salespeople and the F&I office is “be armed with solid product knowledge and the ability to listen rather than talk.” He also mentioned the impact of Millennials in the workforce.” Millennial employees are maligned for being lazy but what we find at AUL is that they work hard and can be very engaged. We focus on creating a culture that is friendly, fun and creative that allows all of us to be a part of an extended family. When that happens, you can keep turnover low and employees happy including Millennials.”

“Millennial shoppers are different from older generations,” explained John Luckett, senior vice president of sales and marketing, The Warranty Group. They have more of an affinity for technology, will consider lesser-known brands and are very dependent on research and referrals. They tend to put more credibility on people with firsthand experience than someone with professional credentials. Millennials are all about instant gratification. They put a premium on speed, ease, efficiency and convenience in all their transactions. The other challenge facing Millennials are loan applications that don’t have enough credit history to generate a credit score using traditional methods.”

John Vecchioni, national sales director, United Car Care, says, “If we aren’t continually and constantly training – about sales and the personalities we deal with, we will be left behind. Millennials will come in with all the information. Our job will be telling them why the products in F&I will match up with their purchase. They already have their minds made up, so we have to meet them where they get their research on the Internet. We have to do something different to take down their expectation that they know what we are doing and why we do it. We need to do something different to create more value – a more logical conversation in addition to sharing the features and benefits. It has to make sense to them.”

Millennials are on the verge of becoming the majority consumer, according to Steve Rosenvall, CEO, Alpha Warranty Services Inc. “They have so much technology and data in the palm of their hand, it may prove difficult to convince them that the dealer has everything they want and need for their buying experience. The dealer, product provider and service provider will need to be on the cutting edge of offering more.  A new buying experience, and technology that supports this new experience, will need to be created and refined in order to cater to the next generation of consumers who speak the language of technology.”

Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., says Millennials are more attuned to detailed research before, during, and after a vehicle purchase. “That level of research requires marketing and sales efforts geared towards Internet-friendly products and reputation management along with competitive and consistent pricing and services. The use of interactive ‘Apps’ that inform customers and encourage dealer retention will also become more frequent and effective.”

Mark Mishler, CEO, Interstate National Corporation, however, doesn’t think there is a major difference in the buying habits of Millennials from other consumers. “Today, most everyone still goes into the dealership to purchase the vehicle. This being the case, F&I products will still be sold in the F&I department with very little differentiation on who or what group is purchasing these products. However, if and when the time comes when a car sale transaction will take place utilizing social media and the Internet and the consumer is no longer going to the dealership, then we will have to think of ways to offer F&I products to these consumers.”

“We anticipate the influx of Millennial shoppers positively affecting dealerships that have established a plan for catering to the younger, more technical, more educated and less patient buyer,” says Kelly Price, president, National Automotive Experts, “There has been much publicity, education and buzz in the industry regarding the importance of selling to the Millennial buyer. It will take some time for this to transcend the industry. The automotive industry has proven it takes a while to make whole scale changes. Again, progressive, forward thinking dealerships have a plan to cater to the Millennial buyer – and they will be successful because of that. As it relates to F&I, the processes and presentation must change to successfully sell to the Millennial buyer. Technology is critical to breaking down the barriers. Millennials demand more and the industry must be willing to provide it in order to attain success.”

Jay Lighter, president, Nitrofill, pointed out that with the vast majority of Millennial shoppers seeking new vehicles priced under $20K, value is key, as is their appetite for technology. “Addressing the issues Millennials care about is also important; products that save them time and money, and perhaps positively impact the environment as well, will be in demand.”

Whether Millennials or not, Bill Gorra, president and CEO, Simoniz USA, Inc., pointed out that the customer experience is first and foremost on everyone’s minds. “Building customer loyalty takes long term thinking; the experience the new car buyer takes from the F&I office needs to be pleasant and built on trust.”

And the customer experience really is the bottom line according to all of our executives. Whether you look at the economy, how things are done in F&I, technology or processes, it all boils down to one thing – are the variables in play creating a positive experience for the consumer? Staying relevant through technology and training on products, processes and personalities will pave a profitable path into 2015 and the years to come.

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An Interview with Dave Mathews


Meet Dave Mathews, President and CEO of United Car Care Inc., a vehicle service contract administrator in Greenwood Village, Colorado. Dave has been in the automotive retail and insurance business since 1975. He has practical understanding of business through the eyes of an experienced agent and former retail franchise owner. Today, he enjoys the challenges of the current business environment and talks about some of the ideas that keep his company competitive. Dave expects the future to be bright and full of exciting challenges. “If you stay focused on your customer’s needs, work hard and adapt to changes in the market, I think you will find success. This is a great market to be a part of.”

  1. Tell me a little bit about your company and its place in the industry?

United Car Care (UCC) was incorporated in 1984 by agents who understand the continual challenges agents face in business. We are authorized to do business in all states with the exception of Hawaii. We began as a regional company, concentrating on Colorado, Utah and Wyoming, but developed a national presence in 1996. UCC offers a variety of extended service contracts for all makes and models. Because we are considerably smaller than most of our competitors, it allows our people to pay close attention to details while offering extensive flexibility to our dealers and clients. Everyday, we receive requests for terms and coverages that didn’t exist even six years ago. We are a full spectrum administrator, covering almost any vehicle the dealer chooses to sell, including high mileage vehicles with over 150,000 miles. You must remain competitive and responsive to last over 30 years.

  1. Are there any recent or future developments within your company?

United Car Care is always looking to the future and how we can impact it along with our partners. From a product standpoint, we recently created both an “add-on mile” contract as well as a “Lifetime Protection Plan”. While our core business is franchise and independent dealers, we have expanded into the lender space and have custom designed products for credit unions and banks.

  1. How did you personally get started? What caused you to choose this career path?

I began my career in the auto industry after college as an F&I manager working for     the second oldest full-line Chrysler dealership in the country. After more than a dozen years in retail, I became interested in the service contract business and gained an employment opportunity with a local general agent. In 1996, I joined United Car Care as executive vice president while sharing a minority interest in the company. I purchased the company in 2009 and today carry the position of president and CEO. The business remains fascinating, working with over 200 franchised dealers every day.

  1. What do you like to do on your days off? What activities/sports are you passionate about?

The company (UCC) is very important to me and I‘ve worked hard to get where I am today, but my family has always come first. In October, my wife and I celebrated our 40th wedding anniversary. Our son, Cameron, works in our claims department as a payment supervisor, while our daughter, Erin and her husband, Asa, have just blessed us with our first grandchild, Fiona LeeAnn.

I enjoy playing golf whenever possible and am an avid Denver Broncos fan.

  1. Tell us about your family and the role they have played in your success.

Having been in the automobile business for 40 years, they have been by my side through it all, being my biggest cheerleader. In 2008, the market collapsed, yet I entered into a buy/sell with my partner at the time to buy the remaining majority stock. My wife and family supported my decision with encouragement and excitement. As we all remember, General Motors and Chrysler were facing bankruptcy, but we held on and today entertain a 200% growth analysis. Having the support of family during these times provides the incentive and motivation to help achieve this kind of success.

  1. What are the biggest issues you see facing the industry today and in the future?

Consistency in the marketplace. No one cares if we get back to the glory years of 2002-2007. We have learned that slow, steady growth works. If you’re not growing, you’re going backwards. United Car Care used to be one dimensional with franchised dealers only, but over the last six years, we have developed a well-balanced book of business by adding independent dealers, finance companies and credit unions. If the business model makes sense, and our underwriter, Dealers Assurance Company, blesses it, we will take on just about any auto related administration functionality. Don’t say “no”, instead always agree to take a serious look at opportunity.

  1. What advice would you give someone new to this industry?

For the folks who sit back and watch how we accomplished what we have, trust me when I tell you, “It was not easy.” You must have a solid business plan, hire good people, capitalize properly and expect to do nothing but eat and sleep this business for the first three to four years. If you sign business today, you may not see revenue for 120 days and, because contracts are cancellable, you must escrow during the high tide because as the past has shown us, there will definitely be a low tide.

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Tablet Technology: Gimmick or Key to the Future?


AE Magazine occasionally receives questions from readers, and recently we got one that we felt needed an expert answer. We reached out to four experts in the field seeking their take on the matter: John Vecchioni; Matt Nowicki; Jim Maxim, Jr; and Shawn McCool. Below, each of them tackled the same question:

“Do you believe tablet technology really adds value to the F&I office, or is it just another gimmick?”

John Vecchioni
National Sales Director, United Car Care

The idea of utilizing a sales menu in the finance office has many merits, but for some, it poses many obstacles in their comfortable sales process. Some will say there is data suggesting increased product sales as a result, and it is hard to dispute that product sales do increase just for the asking, or in this case, for the showing. But if the menu can increase product penetration so dramatically, then why do we need a finance manager? The incontrovertible fact is that menus don’t sell products and never were designed to sell products. People sell protective products on the merit of need and value. It’s always been that way and will continue to be that way. Now, don’t be foolish and look at a resource as something that can’t be utilized. The menu can and will assist you in building value in protective products.

It seems the conversation about today’s technology in the finance office regards the utilization of an iPad for product menu presentations. I suppose there is an argument to be made for iPad usage. One specific argument for using an iPad is ensuring that everyone is able to see every product every time and, of course, any electronic menu can facilitate that. We talk about the menu so much that it has become a daily topic in many stores. Some stores have even gone to the point of having third parties review files to ensure a menu has been presented.

Let me make this perfectly clear, menus, whether electronic, paper or introduced with on an iPad will never sell protective products in the finance office. They will never take the place of integrity and transparency. There is no magic technology that will do the work necessary in building value for the customer and create honesty among those who look for angles to get something for nothing. There is no technology that will build credibility and rapport between the finance manager and his or her customer. In other words, there is no magic bullet. However, the iPad presentation has some merit in that it engages the customer in choosing which product fits their needs. If this is what it takes for a commissioned finance person to present all of his or her product all the time then, so be it.

Keep in mind that the job of sales professionals is to find and fulfill a need with their customers. Technology allows us to present features and benefits in a variety of ways, but it will never perform the act of selling. It will never be able to enhance features in the product that appeal to the customer. In fact, to be honest, the menu is here to stay because of the inability of some to sell product, and to discourage the dishonest practice of payment packing. It also eliminates customers claiming they never were presented protective products when circumstance arose; because the legal community solicits consumers of auto purchases to bring them the paperwork so they can find liability to initiate a lawsuit. Because of the success of these suits, the need to hold the customer and the finance manager accountable has become a necessity for dealers to protect themselves, ironically, from their employees and their customers.

In today’s “gadget” driven world, the use of an iPad to introduce protective products to our customers can create some fun and take the anxiety out of the initial sales pitch. A customer can review products prior to entering the finance office and determine if they have a need, or simply look products over out of curiosity. There are some who would say this is introducing product without knowledge of need. The first step in sales is determining a need before describing features and benefits; to do otherwise would enhance the probability of missing the need of the customer and make closing the sale difficult.

Whether it’s an iPad, electronic menu or a printed menu, the fact remains: never does a sale occur without the customer seeing a need in the product. Need drives value, and value drives decision when purchasing anything. By utilizing resourceful tools that are available, the finance office can become more efficient and, in turn, allow more time in discovery. In the end, the introduction of a product menu is essential to the business; just keep in mind that customer facts trump technology.

Jim Maxim, Jr.
President, MakimTrak Technologies

The anecdotal and observable evidence substantiating the popularity and acceptance of tablet and smartphone technologies for personal and business use is hard to miss. Their mobile advantages help consumers search for restaurants while on the go – and post selfies to Facebook while there – and enable businesses to break free of the PC and take needed data into the field or showroom.

Tablets and other mobile devices are not gimmicks, but rather are valuable production tools for F&I. Using them helps F&I be more flexible. Their use makes consumers feel more comfortable with the sales process, as more and more consumers today use these tools and rely on them to make their life simpler.

If we perceive using tablets as giving away control, we’re still selling in the ‘90s. Once we recognize that consumers today have more control over the car-buying process than many of us would like to acknowledge, we’ll realize that trying to control the sale by managing the information flow and using canned closes simply loses money and customers for the dealership.

Instead, using tablets and other mobile technologies to present F&I options gives customers more control – and consumer studies say that’s important to consumer retention. Tablets put F&I information in consumer’s hands, where they want it and in an understandable format. They are familiar with these tools. They use them and trust them – and perceive businesses that do likewise as businesses they’re more likely to patronize.

We analyzed this concept quite a bit before investing heavily in our new mobility solutions for dealers. Henry Blodget, CEO and editor-in-chief of Business Insider, has posted his research and findings publically for a few years now. He draws several conclusions, but the most insightful that has an impact on our discussions today is this: “Mobile devices will dwarf the number of PCs in the market in the next 24-months and based on global shipment data. Tablets are already cannibalizing the PC market… quickly.”

Matt Nowicki
Vice President of Retail Software, IAS

F&I tablets are as helpful in the F&I office as they are useful keeping young kids engaged! Dealership tablet technologies are very broad and can be used in several ways that range in value from dealership to dealership. The IAS tablet technology, SmartPad, is used everywhere from the sales process to the service drive. But what most of our customers like to use it for is the transition from sales to finance. In addition to creating more sales opportunities, tablet technology shortens the F&I process by gathering and presenting a customizable array of information while the customer is preparing to be transitioned from sales to the F&I office. It goes beyond the typical survey and interview by using dynamic video and multimedia presentations designed to engage the customer in additional sales opportunities once they are turned over to F&I.

Tablet software is also easy to customize because the configuration is often Web-based, meaning dealers can tweak presentations on an as-needed basis and their tablets are updated immediately. At their core, technologies like SmartPad can be used to provide the simple CSI survey style of old, but also have the capabilities of presenting and gathering information in an engaging way that has never before been done in F&I.

Dealers can also go one step further with technologies that offer controlled menu presentation via tablet. These technologies allow F&I mangers to present all of their products in a manner similar to a traditional menu, but also include a host of electronic sales tools, product videos and electronic brochures, as well as other materials which would normally be shown via a paper evidence manual.

If an F&I manager is using the tablet as a simple presentation tool and not utilizing a customer software program like SmartPad, then perhaps it could be considered a new way of looking at the same information. As for IAS, we see tablet technologies as a powerful tool at the finance office’s disposal, which will only increase in popularity in the coming years.

Shawn McCool
Co-founder, iTapMenu

If you think it’s a gimmick, then it’s a gimmick. An example: if you think the pre-delivery interview is a gimmick, then you aren’t going to be successful implementing it into your process. Tablet technology is no different.

Does it add “real value?” If that’s the actual question, and it’s a good one, then of course it does. It provides more content about the products, supports the presenter’s credibility by displaying the cause-and-effect of the transaction to the consumer and speeds up the process. A primary goal at iTapMenu is to take the deficiencies of a paper menu and fill in the gaps. There are some things you obviously can’t do on a piece of paper.

You can’t re-configure a menu column in real-time. You can’t change the term and/or interest rate. You can’t adjust a product price. You can’t choose when to display information about the product. If designed with this in mind, an iPad menu will correct some of the deficiencies of a paper menu; these aren’t features you’ll use every time, but when you need them, at that moment, it’s nice to know you have them available.

To fully answer the question, I would compare a completely committed F&I manager who uses a paper menu with an F&I manager who hasn’t bought in and feels an iPad menu is a “gimmick.” The results will prove this: It has – and always will – come down to the person. But what’s really great to see happen, is the successful F&I manager who thinks bigger. Their CSI is off the charts and their PRU is great, while still using a paper menu. Then they see the tablet technology and they can’t wait to implement it into their dealership. 100 percent of the time, there are improvements, literally every time. The person and their attitude are vital.

How are tablets being used today? I can speak only for iTapMenu: and the answer is a variety of ways. There’s no reason you can’t simply replace your existing menu with tablet technology. You can set up tablet menus with a three-column structure, and fit it into a paper menu process rather easily. But, there are also a large percentage of users that make the presentation mobile, and are exploring the limits of what the technology can do.. We love that. It’s not for everybody, but the feedback from F&I managers who use it this way is incredible. CSI and product sales go up instantly. I could talk your ear off about this, because I see it everyday. It’s a fact at this point. The sample size is big enough to confirm it – literally hundreds of users, all of whom were using a paper menu in their office prior, made this process switch and experienced instant improvements.

As to the future of tablets in F&I, there’s no reason to give you a boilerplate answer. I don’t know. If I did, I wouldn’t make it public anyway! Is it here to stay? That is a fact. But there are still many unanswered questions, such as “what will it do,” and “what will it look like?” It’s going to be really incredible, and the category is going to evolve well into the future.

So, the question is, what will shape the future of tablets in F&I? Typically, the product doesn’t react to a market; the product makes the market react. No one was hoping for someone to create a tablet. Once Apple released the iPad, we all realized how great it was. Hopefully, the same can be said for tablet technology as we continue to innovate it. I’ll give you one hint though – if we don’t have F&I managers, then tablet technology goes out of business. We’re doubling down on the F&I manager. And we feel it’s a great bet.

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The Trends for 2014


There is no such thing as a crystal ball that allows people to see into the future, but that does not mean we are completely in the dark about what could, and probably will happen, especially in the business world. We talked to 17 of the industry’s top executives to get an idea of where they see the automotive industry as a whole, and F&I in particular, heading in 2014. They gave us their top issues, the technologies and products they are watching, and what their predictions are for the next 12 months. It might not be a crystal ball, but it is certainly the next best thing.

The Economy
Our executives had similar thoughts about where the economy would go – in a positive direction. For the most part, our group was optimistic – although some of them cautiously so – about the fact that the economy will grow in 2014. No one expects significant growth, but they do agree that profits and the number of units sold will continue the year-over-year increases they have enjoyed the last several years.

“I think the auto industry is part of the reason the economy is doing better,” said Bob Corbin, president and CEO, IAS. “I don’t think the economy is driving automotive as much as automotive is helping the economy. Our industry affects one in five Americans in some way, shape or form, and we think everything is very positive. Cars were are up about 8.5% for 2013 year-over-year, and we see that trend continuing, to somewhere north of 16 million new car units sold in 2014.”

“The economy still has some bumps in it,” said Charlie Robinson, president and COO, Resource Automotive Group. “We all read the papers and get mixed signals. But the automotive industry is robust, and the general feeling is optimistic for 2014; and the general feeling is that it will continue in that direction. I believe we will continue at the same pace as the preceding few years. If you listen to the pundits, we will see a 4% increase in SAAR for 2014, versus 6-7% increase for 2013. So everyone is expecting another two or three solid years in the auto industry before we look for a downturn.”

“From my perspective, I am cautiously optimistic,” said David Pryor, CMO, Safe-Guard Products International LLC. “We had that government shutdown in 2013 which caused a blip in the automotive industry, and we did see some softness in the last few months. However, all of the indications we’ve had are that we’re getting back to a slow rate of growth. The automotive industry is forecast to come in at about 15.5 million or so once the final 2013 numbers come in. How much further can we go in 2014? We think there’s room to grow – we think we could get close to 16 million next year. There are still many factors in our favor, such as the fact that the average age of vehicles on the road is still the highest seen in a long time. There is pent up demand there. “

“I guess I’m fairly optimistic about the economy,” said Jimmy Atkinson, COO, AUL Corp. “All the signs are that new and used car sales will be strong next year, and there is nothing really on the horizon that could damage that too much, although you never know for sure. But on the whole, I’m pretty optimistic. The biggest thing that drives car sales is lending and credit, and in the last couple of years, subprime credit has been very strong; we’re seeing that more prime lenders are dipping a little deeper as well. So there is a lot of competition and a lot of money out there to loan for cars, which bodes well for next year.”

“I would expect that the first half of 2014 will look a little like 2013,” noted Joel Kansanback, president, Automotive Development Group. “In our market, car sales have been strong, credit has been loose and dealers have been profitable, but I would expect the results for lenders will deteriorate at some point, in probably the second quarter, and we’ll begin to see tighter credit in dealerships in the third quarter. Dealerships will have difficulty getting their customers loans, and there will be a big impact on special finance departments. In concert with that, the theme for 2014 will be that the sales will continue to be strong, and F&I will continue to be strong. The wild card, however, is if the major lenders follow direction of CFPB and put restrictions on finance reserve; if that happens, we could have a major shift fast, and that could happen as early as the first quarter.”

“There are certainly plenty of differing opinions about the U.S. economy going into 2014, but when you look at most of the major economic indicators, continued, modest growth for the U.S. economy as a whole seems likely,” said Scott Karchunas, president, Protective Life Asset Protection Division. “The consensus appears to be between 2-3% real GDP growth for the US. In terms of the automotive industry, 2014 looks like it will continue its upward trend, although at a slower pace. We are expecting new car sales to be above 16 million, which is essentially on par with sales dating back to 2006. However, it’s important for all of us to keep in mind we’re looking at the lowest year-over-year new car sales growth since 2009. Much of the rebound in the automotive industry that we have seen over the past few years can be attributed to two main factors: pent-up demand and credit availability. Dealers have done a great job of meeting this demand; yet we still have younger buyers, lower income segments and small businesses that are not reentering the market as consistently as other demographic segments. It will be important for the automotive industry to find ways to better engage these segments with products and technology that meet their needs.”

“It’s a great time to be in our industry,” said Steve Amos, president and CEO, GSFS Group. “We’re going through changes that are occurring once in 15 years, so it is pretty neat out there I think. Obviously the economy directly influences consumer behavior and confidence, that’s critical to buying cars. And, certainly, buying cars is motivated by desire, but also by need, and as we’ve seen the last four years, consumers who are keeping their cars longer, have pushed the need back. The economy has everything to do with that. As they gain more confidence, they’ll start replacing those cars. OEMs haven’t necessarily built better automobiles, they are just hitting home runs with what they’re doing right now and consumer confidence is there – so it is a very good time for our industry. I think, barring some unforeseen disaster, the economy will continue to improve. I feel good about what’s going to happen.”

“I really don’t see the economy changing a whole lot either way, up or down; I think it’s stabilized as much as it can right now,” said Tim Brugh, president, American Auto Guardian Inc. “Car sales are going to grow, however. Dealerships, especially in the F&I and sales departments, should be in a good position in 2014. I am anticipating another growth year for us, and the automotive industry as a whole.”

“I think it looks like everything has stabilized to a large degree,” noted Tony Wanderon, CEO, NAC and Family First Dealer Services. “Lending has opened up, and customers can come into the dealership and buy cars and we have seen the increase in volume to prove it. I believe we will get into normalized purchase times; there were a lot of customers in 2013 who needed vehicles and that helped us out, but I believe 2014 will be more of a normalized year than the past several. I don’t’ see a lot of things that will jump up and catch us – no major elections, no financial crisis at this point, and everyone has strong balance sheets. I think the economy looks pretty good.”

“I have to say that I would think the economy will stay pretty level,” said Brent Allen, president, StoneEagle. “There is some interesting legislation coming out that could impact it, but for the automotive industry, it is not so heavy. My personal perspective is that it should stay pretty steady, and be a pretty good year. We’ll see continued good sales of cars, and good product sales – investment capital companies are banking on that. They are buying up pieces of this business as fast as they can, and I do see that continuing as well.”

But while the overall economy looks to improve in 2014, a few of our executives did note that political or regulatory issues that started last year – such as the ongoing issues with the Consumer Financial Protection Bureau (CFPB) – could impact the automotive industry, although no one is positive about what those impacts will be, or how they will, ultimately, play out.

“I think the economy will continue to grow, but slowly,” noted Michael Tuno, president, World Class Dealer Services Inc. “It won’t be much different from 2013 – we will still have the same challenges. The only major difference in 2014 from 2013 is a certain political event in November that will certainly have some bearing on the macro environment we all live in. Everyone will still be looking to keep his or her turf safe, and I say that because the automotive industry is cyclical insofar as affordability issues impact it. I still see us having to wrestle with issues such as the debt ceiling, healthcare, etc., so there will be a robust election environment in the fall. So I believe we will have slow growth, and I believe the automotive industry will closely mirror the national U.S. economy. The only footnote is that 2013 has been a pretty robust volume year, but that has been done at great pains for the future of retailers, such as longer loan terms – it speaks to what people can afford, and what can they afford for other major items such as healthcare, etc. The mass market that buys cars, in that 16 million number, will still face those same challenges, and we’ll eventually have to deal with the issue, but I don’t think it will be in 2014.”

“The economy could be unpredictable because of the impact government legislation will have on individuals and companies with the Affordable Care Act,” said John Vecchioni, director of business development, United Car Care Inc. “The industry has benefitted from the down market only because of the limited sales production of the past. People have had to come out and replace vehicles as a result of the 2008 economic calamity. Leasing should become more predominate in 2014 as a result of economics.”

“I see some stress in the economy,” said Glen Tuscan, president, Dealer Commitment Services Inc. “And I see those pressures coming from a variety of different areas. The political environment is stressful on consumers right now, and although the stock exchange is hitting record levels, I believe it’s falsely inflated due to the Federal Reserve. As a result, I think the economic outlook will really show it’s face in the last quarter of 2014. I don’t think there will be a lot of movement – I look at it as an ice cube in Washington – there is some dripping, but no thawing. The elections are affecting a lot of stalemates and because of that there is slow growth. The consumer is under pressure, and we’ll see more of it once those elections are done. I do see a change in interest rates and a change in the economic environment, but for the first half, and even into the third quarter, I don’t see it thawing as much.”

“I think it is going to be an interesting year,” said Kelly Price, president, National Automotive Experts. “I would be surprised if we continue to see the growth that we have seen in auto sales, however. With the CFPB possibly affecting reserves and pricing of products, as well as marketing, it will be interesting to see how this will impact dealers.”

Products and Technology in 2014
Perhaps unsurprisingly, there is more than one product and technology our executives are watching.

eContracting and eSignatures
By far, this was the product category most of our executives touched on, even just in passing. While the rise of the technology for eContracting and eSignatures has been happening for the past several years, many of them believe 2014 is going to see a surge in their adoption. Providers are pushing for the technology, lenders are starting to take a closer look at it, and dealers are beginning to make plans as to how it could fit into their operations.

It will not happen overnight, but this is a product category that all agents should be taking a hard look at. It is also the time to educate dealers on all the benefits; some will be harder to convince than others, and it will take time, but those who start integrating technologies into their dealerships will be in a much better position for growth in the years to come.

“The consolidation of ancillary products (combo products) has grown in acceptance and should continue to grow in popularity in 2014,” said Matt Croak, president, Wise F&I. “Expanded financing options will continue to make loan and lease centered products valuable to the consumer. eContracting of F&I products as a percentage of overall contracts written will also continue its upward surge, as experienced over the past two years. Utilization of third party F&I product platforms, as well as provider integrated solutions will aid in this effort.”

“eContracting is one topic a lot of people will talk about,” said Allen. “And there are all kinds of perspectives on that. A lot of people say it’s stagnant, and some are successful and some are not, but OEMs are pushing it very hard. They are getting the loans in that format, so they are successfully moving that needle forward; I know of one that is pushing 80% eSignatures on the finance side. What we’re seeing is, because of that, the finance side is starting to reach out to get a seamless deal jacket. We have, however, seen a lot more success on eContracting than on eSignatures. There is quite a bit of success on the data, but the signature is the hook. It is the one piece that, for the most part, is not electronic today. Once you can capture that properly, the whole deal can be electronic. It is the lynchpin, and I think that will grow a lot in 2014. There are still things to overcome – how many signatures do you need for example. Can you do it once and apply to all documents? Probably not today; step one would be great if we could figure out how to get all the forms together so they can be delivered from there, so it is a single experience.”

“I see the product offerings as more evolution than revolution,” said Atkinson. “The way products are presented will change more than the products themselves. Customers will be able to interact with products through tablets or enhanced software at the dealership. I certainly think things on that front are getting faster, but there are still some challenges there. For example, I recently bought a car, and it was going to be a paperless transaction – and it was in that I signed a touchpad. But then there was the biggest printer I’d ever seen, and they printed out reams of paper, so I am laughing at the idea of paperless. We really do still have a ways to go on disclosures and legalities to where it’s truly paperless. But I do see the trend to move in that direction accelerating.”

“With the numerous recalls and quality issues of many manufacturers, I believe that we will continue to see growth in the VSC arena,” said Price. “It is getting harder and harder for people to say ‘It’s a Honda/Toyota/etc. and it won’t break’ – especially with all of the electronics comprised in a car these days. But I do see eBusiness solutions as definitely taking hold. We are seeing more and more of our business processed electronically. eSignatures are going to be more of an issue with each state, and whether they are an acceptable form of signature; we will be ready when they are.”

“All of our customers are eContracting at one level or another,” said David Trinder, CEO, F&I Administration Solutions LLC. “Some are receiving well above 90% of their contracts electronically, while others are still at the 30% level. It has all been a matter of effort. The more providers push agents to push dealers to eContract, the more successful they have been. It is also interesting that the providers pushing eContracting the most have also seen the greatest sales volume growth. What I am certain of is that in 2014 most providers will feel more push from the other side – the dealers and agents will be insisting on eContracting, so the percentage of eContracting should show a healthy increase in 2014. eSignature is another matter. The requests for it have increased significantly in the past few months, but the demand is not there yet. I expect use of eSignature will grow in 2014, but it will not be mainstream for a year or two at least.”

Appearance Protection
Appearance protection products have been around for years now, and in 2013, we started to see a real increase in consumer interest for these types of products. Our executives see that trend continuing. In fact, after the product mainstays (VSC and GAP), the appearance protection category is the one our executives predict will be the next biggest seller in the F&I office.

“The big three products are always vehicle service contracts (VSC), then GAP, then tire and wheel. I see appearance protection products being resurgent in 2014 however,” said Corbin. “They are a great value for a consumer – consumers don’t go to Best Buy to take pictures of their new fridge, but they do take pictures of their new car. They love their cars, depend on them, and want to have a good-looking car, and that is what providers who provide protection are giving them. I see a resurgence in that product in dealerships in terms of penetration.”

Mobile Technologies
Another big trend our experts see continuing is the push toward mobile technology in a wide variety of ways. From the technology found in the cars themselves to the way F&I is presented and sold, mobile is still in the “early days”. While there are dealerships that have embraced it and had a great deal of success, those stories are in the minority. There are far more that either have not seen the success they had hoped for, or who have not looked at the technology at all. Our executives believe that, as with appearance protection products, this will not be a new trend, but it will be one that will continue well into 2014 and beyond. And agents need to make sure they are educating themselves and their dealers so that it does not catch them by surprise.

“It is too early in the game with tablets and mobile devices, but I strongly believe that they will be the trend over the next three years,” said Kaizer Siraj, CIO, Safe-Guard Products International LLC. “You can think in terms of point-of-sale – how do you make products more visible? Mobile would allow consumers to evaluate the products, and there is very neat opportunity across the board for that. The second area mobile will impact is the service drive. Take a step back and think about it: the customer comes in with a problem, and we want to make the experience compelling and smooth. Mobile devices and tablets integrate with other back office systems to make that happen. Mobile will play a key role in the future, but the enablers will be about integrating with multiple lenders and multiple partners. So the mobile tablet is in the early stages, but I see that as the direction the industry will ultimately head in.”

End-to-End Solutions, Pricing Options and Lease Products
These three trends are also continuing from 2013, but fewer of our executives see them as being major ones to watch – although they are important.

End-to-end solutions refers to the software technologies that track a customer from when they drive onto the lot until they take delivery. These systems tie together every process in the dealership for a seamless customer experience. They have been around for a while now, but as with mobile technologies, they are still maturing; however, our executives do believe they have started to hit a point where there are solid, reliable solutions that will start to take hold. This is probably not going to be a major trend to watch in 2014, but smart agents will be keeping abreast of the providers and the technologies they are working on for the years ahead.

“I think we’ll see the emergence of more desking tools in 2014,” said Robinson. “They are out there now, but I believe they will continue to gain popularity. They will put F&I and the front sales team more in concert; the dealership wants to watch how deals are negotiated, to make sure they’re done correctly. Some of them will print out reports that will show managers the deals, so desking tools that track the way sales are negotiated will become more popular as time goes on. This is all part of an end-to-end solution. Everyone has been promising products for 10-15 years that allow the CRM to feed into a desking tool, to feed into the back office, etc. I think the industry has been struggling for those seamless systems to evolve and work as they should, and I think we’re finally starting to see them take center stage.”

The emergence of pricing options such as bi-weekly payments was a major trend when the economy and industry were down. Now that things are picking back up, consumers are more easily able to afford traditional payment methods, but while the economy has improved and continues to do so, there are still many consumers with cash or credit problems who still need to purchase vehicles. Our executives believe that the trend for dealerships to have those options available will continue to grow. This is a category agents should be looking to add to every dealership portfolio. It gives the dealers more options to get into cars, and lets them be heroes, which in turn increases customer retention.

“I think you’re going to see increased interest in biweekly products,” said Tuno. “It means the buyer is able to take those longer loan terms and afford a purchase, but be able to pay it off and get back into the trade cycle in a shorter period of time. There is a growing awareness of that product; the seven-year loans rampant in our industry are detrimental to the dealer in getting the customer able to trade their vehicle and get them into another car in a reasonable period of time. Biweekly products both ensure the dealers’ and consumers’ interests are best served.”

Leasing is another product category that many of our executives touched on. Leasing tends to occur in cycles, and we are well into an “up” cycle at the moment and providers have risen to the challenge with more products designed specifically for lease customers. This is where appearance protection will also see a surge, since it is, by far, the biggest product category for lease customers. Wear and tear is the second biggest, giving consumers piece of mind for when they turn in their lease, and if dealerships are not pushing F&I products to every lease customer, then they should be trained on how to sell to that segment.

“Lease products are going to keep increasing penetration,” noted Brugh. “Things like ding and dent, or excess wear and tear. We have seen some nice maintenance programs with a little service contract tied to them. I really think the lease products have seen a lot of growth over the last two years through both OEMs and dealerships. They give the customer a lot of good coverage, so I believe those products will surge forward in the leasing market.”

Customer Retention and Data
Customer retention was a big topic in 2013, as many started to realize that the age-old idea that it is easier to keep a customer than earn a new one applies to the automotive industry as much as any other. That, our executives firmly believe, will continue well into 2014 and beyond. This is where F&I plays a huge roll – products such as pre-paid maintenance are tools to help get consumers back in the dealership, and keep that dealership at the top of their mind, so when it is time to purchase a new car, they are far more likely to return.

Related to that, selling products in the service drive started to see more dealers showing interest toward the end of 2013, and that will continue into 2014. There is still a great deal of resistance by service managers to selling products, but this is where a good agent comes in. Agents can help the sales and service departments, as well as F&I, because they uniquely understand the importance of the products and how they impact everyone.

“We’ve had conversations with many partners, and one of the trends they are all seeing is the idea of customer retention,” said Pryor. “It is becoming an increasing focus in terms of products in the marketplace. Dealers are looking at providers with higher frequency and opportunity to use F&I products to build relationships with their customers. Thinking about that, it kind of sets it up for things like prepaid maintenance, tire and wheel and service contracts. Things that keep that customer coming back – the ultimate goal is selling them another vehicle when they’re ready to trade it in.”

“I think there’s an evolution of products right now,” noted Tuscan. “But any dealer not doing their own maintenance plan is missing an opportunity. They are designed for dealers to bring customers back, and then to take that customer and turn them into a client. If dealers are not using something like this, they will always be buying customer business instead of earning it, and planned maintenance is truly one of the best products for building that relationship. And that will help the dealer through the coming year, because now he’s got customers committed to his business instead of defecting elsewhere. That, to me, is the number one staple product. That is, essentially, building two departments: the dealer is capturing business in F&I, and then turning them into a customer in the service department. That will reap benefits years down the road.”

“I think dealers have to accept that the second the customer leaves their dealership after purchasing a new car, the dealer is immediately competing for their maintenance business with at least 40 or 50 other businesses,” said Kansanback. “So anything they can do to try to control the customer coming back for the maintenance at the time of sale will be critical. When I’m here and buying a car, you can sell me a package, set appointments, do all kinds of things, but the second I leave with the car, you’re just mailing me coupons, and that won’t drive my behavior because consumers today still perceive the dealer to be expensive and slow.”

“Dealers are reaching out to get customers back in the dealership with maintenance agreements,” said Wanderon. “Service agreements are still the number one product in our marketplace but it can be any product that keeps the customer both dealer and brand committed. And the dealer/provider is giving the customer something to minimize their risk of some catastrophe that might affect them such as theft, loss or loss of value, so it’s a win for everyone. I see those products maintaining their continued increase.”

Broader Offerings
Finally, many of our executives touched on the fact that while the top selling products will remain the same, that doesn’t mean there are not other ways to approach them. Combo products – or bundling several products together – are a hot topic, and our executives believe this trend will continue to gain steam in 2014. The practice of bundling multiple products together has gotten scrutiny from many of the top providers, and agents should expect to see more of those bundles coming out in the coming months. Not only does it allow the dealer to get more products on the menu without making it overwhelming, but it also streamlines the process for the consumer, and often comes with a slight discount, making it even more attractive.

“The menu is pretty full right now,” noted Amos. “all of the insurers out there are looking for the next new product we can put in play and gain a lot of revenue, but right now we have to consider menu – it can’t get too big. I think a lot of the jostling for positions is really falling into place; VSC and GAP are big, and the big riser for us in 2013 was prepaid maintenance. I see tire and wheel as a solid product, continuing to increase year after year, and I believe we will see more bundled products next year a well – bundles will be combined with windshield, paintless dent or tire and wheel, all sold in one package at a reduced price. I think in 2014 we will see that become more prevalent, as it has really become mainstream now. Ancillary products have also become more acceptable, with providers more comfortable with their risk, but as far as what’s new, nothing will go on the menu unless it’s a product that will replace something already there.”

“The type of F&I products the average car buyer responds to look, on the surface, much the same as what has been offered in the past,” said Karchunas. “Service contracts and GAP will remain cornerstones of the F&I product offering, but consumers are better informed than ever before and expect greater value from a simplified product. The typical car buyer wants a protection plan that is both easy to understand and reliable. The cars that both domestic and foreign manufacturers are producing now and into the future are being driven for much longer time periods. These same vehicles are also utilizing more technology than ever before. The consumer is often open to purchasing F&I products that provide the reassurance that they are protected against potential problems with the technology as well as the mechanical components. This is why it’s more important than ever to rise up to the challenge of providing a protection plan that is easy to understand, yet provides coverage for increasingly complex vehicles.”

Predicting the Future
What do our executives see for F&I and the automotive industry in the coming months? They let us know their predictions about what will be important, what will change and what will stay the course.

Continued consolidation – both of providers and dealers – was a major issue many of them touched on. They see the trend continuing, and it will get harder for smaller providers and dealers to compete. That trend also applies to agents – the trend is toward agencies with multiple agents. Not to say the independent agent cannot continue to compete, but it will only get more difficult as time goes on, and will require, our executives said, those agents to focus on more than just products. Training, being involved in the staffing of the entire dealership and finding new ways to increase revenue, such as service drive sales, will all be crucial skills agents will need in the years to come.

The increasing influence of the Internet is another major trend our executives are watching closely. The younger generations that grew up in a connected world are beginning to reach an age where they are purchasing cars. The experience they are looking for is vastly different from that of their parents – and dealers need to be adapting. Again, this is where agents can and should be stepping in – educate your dealers on what the new generations are looking for, from mobile apps to a more complete online buying experience, and then help them find and implement the right solutions to reach those buyers. This is another trend that won’t happen overnight, but savvy dealers and agents are trying different solutions to work out the bugs while the percentage of the buying population looking for this type of experience is still fairly low. It will only get more critical as the years go by.

Our executives also called out the increasing emergence of hybrid and electric vehicles. They have been on the market for a number of years now, but as the technology has improved and the cost has come down, more consumers are seriously looking at these vehicles as an option. And F&I will need to adapt. There are many products out there that apply equally to these types of vehicles as traditional cars, but there is an opportunity, both for providers and agents, to create or find products or packages geared specifically for these vehicles.

“The trend I see for the automotive industry as a whole is really continued consolidation,” said Wanderon. “Increased technology will allow providers to offer more of a solution, so you can price your products based on each customer’s driving habits and risk, rather than on vehicle models. It is difficult to price products based solely on a particular vehicle, so you end up with more of a blended rate – I think it is going to get more granular in 2014 and beyond. So someone who drives better and who maintains their car at a higher level will be provided something at a lower cost than someone who drives harder and doesn’t maintain as diligently. For F&I, really the only trend that’s out there right now is focused on the regulatory side and where that’s heading. There doesn’t seem to be anything on the horizon that’s game changing other than that, although there has been a lot of consolidation in our business. A lot of the major players have either been acquired or purchased others, and dealerships are doing the same thing, so I see that leading to a continuing process of centralizing the F&I office.”

“I don’t know if it’s a trend or not, but while we’ve had technology forever, it’s been rough getting everyone acclimated to using it,” said Brugh. “The younger generations are used to not touching a piece of paper, they either have everything on computer, or on their phone or iPad. But my generation still likes to touch the paper. We’re still trying to get people to accept that change, but once you get dealers and providers past that, we will see them doing everything online. It will get there, it’s just a slow process. One of the problems is that a lot of dealerships still don’t even have the infrastructure to house the technology in the first place. They don’t have fast enough lines, or computers with memory or hard drives to get them where they need to go. It is all part of an education process – it is already changing, and we will see more changes coming, but at the end of the day, it all depends on how much a dealership wants to embrace the change.”

“I don’t think F&I has changed much in the last 25 years to be honest,” said Amos. “The trends we look for are more from the compliance and disclosure perspective of the transaction the dealers are doing when selling our products. That is something we constantly are watching, and we are very proactive in our relationships with our dealers. But at the end of the day, F&I is very basic when it comes to offering products: price them correctly and the consumer wants to buy them. Transparency and disclosure are the dealer’s friend. Once they do that, then it is just a matter of watching the processes. For the greater automotive industry, I think hybrid technology will take off big time. We insure a lot of Toyota business, and I think they are going to be making hybrids out of everything. It is solid technology and very effective – other brands like GM and Ford also have hybrids, and we even see hybrid trucks coming out. That is one thing we’re going to see surge in 2014. ”

“At Protective, we are keeping an eye on similar trends that we have been monitoring for the past few years, such as the steady growth of alternative power systems (like hybrids), technology and connectivity,” said Karchunas. “Consumers are bombarded with new forms of technology and their desire for more efficient vehicles is growing at a steady rate. We are working hard to stay ahead of these trends to develop F&I products that meet these evolving needs both today and well into the future. For F&I specifically, for the past year and a half, we have been keeping an eye on the developments with the CFPB. Even though most auto dealers are not directly subject to CFPB regulation, this has obviously become a hot topic for the auto industry. Over the course of the next year it will be interesting to see how the industry adjusts processes to meet the potential impact of CFPB guidance. At the end of the day, the need to support F&I operations with reliable products, training and administration remains intact, regardless of whether the CFPB takes further action affecting auto sales and financing. Dealers and their F&I staff need products that provide value to their customers and they need to know these products are backed by a financially stable organization that is interested in helping protect their reputation. “

“I think menus will continue to be critical part of the transaction in F&I, and that F&I managers will be much more engaged in the sales process, not just focused on what is happening in F&I,” noted Tuno. “It is siloed right now, but I think there will be more integration between the consumer buying the vehicle and everything that happens up until they get it delivered. All that technology is there today, it just isn’t too far along in its maturity, but I think there will be a push for an end-to-end solution. The technology will drive a more lean and efficient process, and retailers that have it down are the ones that can eke out the margins. The most efficient might see 5% return as a percentage of gross revenues, but most are going to operate at 2-3%; the 5% are the ones who have the process down from the front door to delivery of the vehicle. Technology will create a much more conducive solution, especially for the younger generation, which is used to communicating less with people in face-to-face environments. There is the whole idea of Internet, and millennials, gen x and ys – they all use it. Even baby boomers like me use the Internet a number of ways when purchasing a vehicle. This generation wants to show up at the dealership much further along in the transaction than in the past, and they don’t want to spend more time than necessary in the dealership itself. We already have the groundwork for that kind of business model, and I think we will see more of it in 2014.”

“It is imperative that lenders, providers and dealers alike focus on compliance not just on the state level, but also on the federal level,” said Croak. “This is evident by the growth in membership of such F&I-related trade associations as GAPA, SCIC and MVAPA. I also think that changes in the vehicles themselves may require a thoughtful look at the benefit coverage options in the F&I products so that they align more closely with the underlying vehicle.”

“We are watching how consumers will feel about and utilize the online buying choices being offered by manufacturer’s like GM,” said Price. “I also believe this coming year will be an interesting one with how banks handle the compensation of financing reserve. It’s a ‘hold your breath, close your eyes and hope for the best’ situation. The only suggestion we are making to dealers is they better learn to rely on product sales! For those dealers earning more than 30% of their income from reserve, they will be taking the biggest hit. Product sales should encompass at least 70% of the profits in F&I.”

“For the automotive industry, I think the IPO offering from Chrysler will reveal how strong their production in North America and abroad is, and that is something we are watching,” said Vecchioni. “The retirement intention of the Ford CEO Allen Mullaly and the future of Ford abroad are also major issues that could impact the industry. I think that leasing with amicable numbers that make sense can and will drive new sales, as well as replenish the pre-owned inventory, and the Affordable Care Act will dictate manufacturing levels throughout the United States. If the employment numbers, with good wages, goes up, the industry will also see more sales. I think the mid-term elections will determine quite a lot in the minds and comfort of most Americans, and that will impact our industry either up or down.”

“I think expectations will continue to go up,” said Kansanback. “The margins are still compressed on the sale of vehicles, and dealers are not going to tolerate underperforming F&I departments. It is not always going to be us, but dealers need to partner with someone who has the resources to help them – it is not practical for them to be an expert in every department. Another macro trend is that dealers are having trouble hiring people with good experience; training is always important, but when you’re having to go with the less experienced, incomplete resume candidate, training is that much more important. I think that if interest rates stay low, unemployment should go down, and if we had trouble in the depths of recession hiring good people, as that number goes down, it will just get harder.”

“I believe the key thing for the industry is where vehicle sales ended up in 2013 and what they are projected to be for 2014,” said Atkinson. “The credit environment for lending and the CFPB and what they’re bringing to the table is going to be crucial. We are seeing the government getting more active in the regulatory sense, and a lot of companies like AUL are members of organizations that are becoming very active federally, and more active in state legislatures as well. We have got to get more informed across the country; groups like NADA are getting much more aggressive working to educate people on what’s going on, and educate the CFPB on what goes on in a dealership, to show them the domino effect from their decisions. But there has to be more advocacy and industry awareness – we can’t sit back, we have to be proactive, and that means getting dealers, agents and providers involved in the conversation.”

“I see a change in consumer interaction in a couple areas,” noted Tuscan. “I think internet sales are going to change – that is slowly changing now. The customer wants to be more involved before he or she enters the dealership; they want to have almost everything done before they even walk in the door. There is a race for gen y and millennial customers right now, and they are totally different from you and I. This 21/22/23 year old buyer doesn’t want to enter the brick and mortar atmosphere, they want to do a lot more buying before they walk in. I believe that is a major trend happening right now. The challenge for F&I is that we need to be part of that conversation. We need to find a way to communicate our products and opportunities to those consumers. It is all about time to them – they are so used to the smart phone atmosphere and instant responses, that it feels too slow to move the traditional way. I’m not saying every transaction will happen that way, it will take some time to get to that point, but I see that trend happening now. I don’t, however, ever see us removing F&I out of the process completely, it will just be a more interactive process.”

“I think the big question on a lot of minds is the impact of CFPB, and I think we’re all watching to see where that goes,” said Pryor. “I know there is a lot of debate on Capital Hill, and among the OEMs and retailers as to what this will mean; I think as we get more clarity, you’ll see some shifts in how the F&I office is going to market, in both the product mix and in greater transparency for consumers, as well as more education as to value of the products. That is the overriding goal – to make sure consumers are receiving a fair value for what they’re paying. As long as we as an industry can justify that, it will put us in a better position moving forward.”

“I don’t think we’ll see much of a change overall in 2014,” noted Robinson. “VSC will still be number one, GAP will be number two and some combo that includes tire and wheel will be number three in the F&I department. Those will be the big three, and I don’t see that changing. The thing we really watch is the manufacturer’s underlying warranties, and how they change their coverages. The trend has been for the factory to go with longer underlying warranties, so we are watching that closely. Other than that, I think it will be emergence of electric cars and their impact on our market that will have an effect, but even then, there is nothing earthshattering, other than CFPB and the impact they’ll have on lenders. We will be watching that very closely.”

“I think everyone is watching CFPB in 2014,” noted Corbin. “Are they going to try to extend reach past lenders and lending practices and into automotive dealer F&I department operations? We are all watching that, the trade associations are monitoring that, and as an industry we need to take some leadership roles with the CFPB. We need to educate them as to what the benefits of a fair market process in the F&I department are to consumers. That’s one that could be potentially negative that we’re watching. We also continue to have dealers who want to partner with us to experience the use of menus on mobile devices; to untether themselves from the F&I desk. They want to be out in the showroom and more interactive with consumers, putting them more at ease about finance, protection and payment options. We will continue to use tablet technology in our SmartDealerProducts division and to partner with dealers on new techniques, all of which will result in higher consumer satisfaction scores and higher results.”

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