On Thursday, TurboPass awarded six of its subscribing dealerships with an End of the Year Award, including honors for Independent Dealer of the Year, Franchise Dealer of the Year Newcomer of the Year
Both the East and West regions of the country received each of these three awards from the financial technology software company that helps enhance stip fulfillment and underwriting.
Dealerships receiving the Newcomer of the Year award are the stores that signed up this year and used TurboPass more than any other dealer in their region. Both the Franchise Dealer of the Year and the Independent Dealer of the Year awards are for those that have used TurboPass the most in their region.
In the East, Newcomer of the Year was awarded to Lakeland Carmart in Orlando, Fla.
“This is one of those dealers that hit the ground running,” TurboPass vice president ofdealer direct partners and resellers Steve Kochurov said in a news release. “It’s dealers like Lakeland Carmart that keep us passionate about bringing value to the auto finance space.”
The top producing Eastern Independent Dealer of the Year is American Dealer, also in Florida. This dealership was one of the first 100 dealers ever to try TurboPass and is closing out 2022 with more than 2,000 TurboPass reports pulled just this year.
Toyota of Hollywood is being awarded with the Franchise Dealer of the Year award in the East. This dealership has pulled more TurboPass reports than any other dealer to date.
“TurboPass is the tool I don’t want my competitors to know about,” Toyota of Hollywood special finance director Max Martinez said. “We have pulled as many as 400 reports in one month.”
For the West Region, the TurboPass Newcomer of the Year is Specialty Motors of Austin, a Texas dealer. Starting a subscription in the middle of tax season, TurboPass said the store immediately found success and committed to an annual subscription within just two months.
The Franchise Dealer of the Year in the West Region is Zeigler Chrysler Dodge Jeep RAM. Located in Illinois, the store pulled in the most reports out of any franchise dealer west of the Mississippi River.
The sixth award, the Independent Dealer of the Year in the West Region is Brand Motors, a California dealer. Having been signed up with TurboPass since October 2020, this dealership has pulled nearly 1,500 TurboPass reports.
“On behalf of the TurboPass team, congratulations to these dealers and a big thank you to our nearly 3,000 dealer customers for their business in 2022,” TurboPass CEO Mike Jarman said.
For more details about TurboPass, go to https://www.turbopassreport.com.
GWC Warranty wanted to give dealers recommendations to develop new processes designed to increase customer satisfaction and build loyalty.
So this week, the provider and administrator of automotive F&I products released a free eBook titled, “A Dealer’s Guide to Transparency in the Sales and F&I Process.”
“Auto dealers have made great strides towards being more transparent, but there is still a significant gap to fill between dealers’ perceptions and consumer expectations,” said James Virgoe, senior vice president and managing director of GWC Warranty, an APCO Holdings Brand.
“In fact, a recent Capital One survey found that 77% of dealers believe the car buying process is transparent, but only 26% of buyers agree,” Virgoe continued in a news release.
Through the ebook, GWC Warranty highlighted that dealers will learn why transparency is important, the benefits they can see if they deliver more transparency, as well as what information consumers want during the purchase process.
The company added that the eBook shares tips for building a culture of transparency in the dealership and best practices for developing a transparent sales and F&I process.
“The last two years have been an anomaly in auto retailing, where dealers have benefited from high profit margins and PVR,” Virgoe said. “As the market becomes more competitive, dealers will need to deliver a transparent process if they want to attract and retain new customers. Today’s consumers no longer accept a paradigm where they are kept in the dark about pricing and other aspects of the purchase process.”
To download your free version of “A Dealer’s Guide to Transparency in the Sales and F&I Process,” visit the GWC Warranty Resource Library.
If you didn’t already know, StoneEagle F&I senior vice president of business development Joe St. John is one of the most enthusiastic executives anywhere in the automotive industry.
Well, when St. John dissected the first-quarter data gathered via StoneEagleMETRICS, his excitement level ticked up a few notches because he found what might be a “silver lining” for dealerships and finance companies.
The specific data is included in the current edition of SubPrime Auto Finance News and a further discussion about it is available through this Auto Remarketing Podcast episode featuring St. John.
To hear the conversation, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
Joe Biden’s victory likely will usher in a new era of consumer protection and compliance challenges for auto dealers. Four out of the five Federal Trade Commission (FTC) Commissioners will have their terms expire during the Biden Administration. President-Elect Biden will have the power to replace the head of the Consumer Financial Protection Bureau. The Democrats will, for at least two years, control the House and maybe the Senate, too.
The Democratic Party Platform stated that a Biden administration would work “to ensure equitable access to credit and banking products for all Americans, and reinvigorate the Consumer Financial Protection Bureau (CFPB) to ensure that banks, financial institutions, and lenders cannot prey on consumers.” The Platform also indicates Democrats will “eliminate the use of forced arbitration clauses.” Strong language is also given to protecting consumers’ rights to privacy and protecting consumers from data breaches.
In short, as Democratic Sen. Chuck Schumer said with respect to the Supreme Court, everything is on the table.
That being said, it is reasonable to expect changes in the automobile world to be evolutionary not revolutionary. The Trump administration has put new staffers at senior levels in the CFPB and FTC. While some of these people may leave or be replaced, there will not be a wholesale firing and replacement of Republican staffers on day one.
Here are some thoughts on what to expect.
CFPB
It is important to remember that Sen. Elizabeth Warren, the original architect of the CFPB, will have an important voice in Biden administration policy. Warren raised concerns earlier this year about auto finance and has indicated her disdain for auto dealers in the past.
“Auto dealers got a specific exemption from CFPB oversight, and it is no coincidence that auto loans are now the most troubled consumer financial product,” Warren said. “Congress should give the CFPB the authority it needs to supervise car loans – and keep that $26 billion a year in the pockets of consumers where it belongs.” The $26 billion per year is Warren’s estimate of total dealer participation which Warren would like to eliminate.
Warren is also closely aligned with Richard Cordray who headed the CFPB during the Obama administration. You may recall that the CFPB under Cordray published the agency’s bulletin on auto finance indicating that dealer participation resulted in disparate impact credit discrimination. In May 2018, the Congress passed a joint resolution that was signed by President Trump disapproving the bulletin.
Disparate impact credit discrimination involves facially neutral practices that have the effect of discrimination. Actual intent to discriminate is not required. Disparate treatment credit discrimination generally requires intent to discriminate.
The U.S. Supreme Court in 2015 decided the case of Texas Department of Housing versus Inclusive Communities Project. This case appeared to make it harder to bring a disparate impact credit discrimination case under a statute like the Equal Credit Opportunity Act (ECOA) although ECOA was not at issue in the case. ECOA prohibits “any creditor to discriminate against any applicant with respect to any aspect of a credit transaction.” This picks up disparate treatment credit discrimination. But ECOA does not prohibit acts that “otherwise make unavailable” credit to protected classes as does the Fair Housing Act which was at issue in the case. It was this language that the Supreme Court ruled 5-4 picks up disparate impact credit discrimination. The Supreme Court has not ruled on whether ECOA prohibits disparate impact.
FTC
FTC commissioners serve staggered terms. No more than three commissioners can be of the same political party. Two Republican commissioners will have their terms expire in 2023 and 2024, respectively. When replacing a commissioner, including a Democratic commissioner as will occur in 2022, it is reasonable to believe that a Biden administration will appoint someone more leftward leaning than a Republican president would appoint. Over time, this could lead to a more activist FTC including against auto dealers and auto finance about which the FTC has held hearings.
FTC staff members may also turn over and it is not unreasonable to believe that more liberal replacements may be appointed. Expect the FTC to be more active during the Biden Administration although how soon and how much so will remain to be seen.
The Department of Justice (DOJ)
The DOJ has brought criminal actions against auto dealers, their owners, and their employees for bank fraud, interstate wire fraud, and other federal criminal law violations. Several dealer principals as well as F&I personnel have served jail terms for defrauding federally regulated lenders by, for example, submitting falsified credit applications, power booking, and other fraudulent behavior.
President Biden will appoint a new head of the Department of Justice to replace William Barr early in his term. This person will obviously be more liberal than Mr. Barr. It is reasonable to expect that senior levels in the DOJ may likewise move to the left. This could result in more investigations, enforcement actions, and criminal proceedings against auto dealers who falsify documents and misrepresent transaction information to lenders.
State attorneys general
The CFPB and State Attorneys General (AGs) act in close concert on consumer protection matters. During the Trump administration, many enforcement actions against auto dealers have originated with State AGs.
An activist CFPB and aggressive AGs can be expected to pursue more claims against auto dealers. Your state AG is the most likely regulator you will encounter. It is critical that you have a policy and procedure for addressing consumer complaints. Use this procedure for every consumer complaint. Remember that even a small complaint can become a big problem if the consumer reports it to the Attorney General.
What’s a dealer to do?
If you have put compliance on the back burner during the Trump Administration, now is the time to get prepared, review and update your policies, and train/retrain your employees. A checkup with your legal or compliance advisor is an excellent idea.
The Biden administration is likely to focus on safeguards and privacy so make those first on your list. (Review your privacy notice and make sure it states what your actual sharing practices are). Consumer protection in sales and f & I will be another area for activist agencies. If you have not already done so, adopt and implement the NADA Fair Credit Compliance Program and the NADA Voluntary Protection Products policy and program.
In recent enforcement actions, the FTC has made dealer principals jointly and personally liable with the dealership for violations including broad unfair and deceptive practices violations. This trend will continue. That should be reason alone for your senior management to give priority to compliance as the Biden Administration takes over.
Randy Henrick is an auto dealer compliance expert who provides compliance consulting services to dealers directly at www.AutoDealerCompliance.net. He served for 12 years as Dealertrack’s lead regulatory and compliance attorney and wrote all Dealertrack’s Compliance Guides. He has presented workshops at five NADA national conventions and speaks to dealer associations, 20 Groups, performs deal jacket auditing, and prepares training and other compliance materials for dealers. Because of the general nature of this article, it is not intended as legal or compliance advice to any person but raises issues you may want to discuss with your attorney or compliance professional.
Have a 2001 model that still looks sharp, runs nicely and remains a great option to attach F&I products? Now dealers that use GWC Warranty have that option among a host of other potential ways to generate finance-office revenue.
This week, GWC Warranty looked to modify its product lines so dealers have more options in connection with the vehicles they might already have in inventory, especially older models that budget-conscious buyers might be seeking.
With this expansion, GWC said it is even better positioned to help dealers drive results by offering the right F&I solutions to cover more of their inventory as well as the different needs of their customers. Dealers can now provide service contracts for older models on their lot with new coverage options for vehicles up to 20 years old.
GWC is also introducing coverage for more than 120 previously excluded high-line vehicles. Recognizing a growing need in the industry, coverage is now available for vehicles used for commercial purposes, giving drivers entering the rideshare and delivery market the chance to protect their investment and their livelihood.
The company explained it launched significant updates to its core vehicle service contract offerings based on market feedback and industry trends in an attempt to improve GWC’s ability to serve the needs of dealers of every size.
“Dealers are facing an increased need to optimize every opportunity. By providing the right F&I products for inventory they have on their lot, GWC can help dealers drive the results they need from their used-car operation,” said Matt McKenna, senior vice president of GWC Warranty & APCO.
“With this product expansion, we’re giving dealers more options than ever before to optimize F&I sales to increase total revenue and overall profitability while raising the level of protection they can offer their consumers,” McKenna continued in a news release.
Other significant changes in this update are designed to help dealers provide a better experience for drivers and avoid post-sale dissatisfaction, including improved driver benefits like rental car or substitute transportation coverage, roadside assistance and trip interruption protection.
GWC is also introducing new deductible options to give drivers more flexibility over what they’ll have to pay out of pocket, including a disappearing deductible option for dealers with a service bay that encourages customers to return for maintenance and repairs. Dealers can also offer buyers contracts with an “any time, any reason” cancellation policy.
“We took dealer feedback very seriously when developing these changes,” McKenna said. “Dealers want flexibility in both terms and conditions in their vehicle service contract offerings.
We’re introducing hundreds of new term and mileage combinations, including even more competitive rates and term options for vehicles that still have a basic manufacturer’s warranty remaining,” he continued.
“And, as part of our goal to protect our contract holders from out-of-pocket repair costs, we’re now offering coverage on sales tax for diagnostics, labor and parts for eligible repairs,” McKenna went on to say.
To learn more about GWC, visit www.gwcwarranty.com.
Darwin Automotive said this week that it released the final application needed for Virtual F&I orchestrated by JM&A Group.
Darwin highlighted that it’s giving the tool Documents on Demand for free to all new and previous dealer customers.
The company explained Documents on Demand includes the following features and functionality:
• Flex Forms: All dealership documents can be uploaded into the system and printed as PDFs.
• Usign: All documents that allow for electronic signature can be mapped within the application by the user with just a few clicks. This includes installment agreements that allow for e-signature collection.
• Smart Stips: This feature allows the manager to send a secure link to a customer so they can upload items including proof of residency or insurance, driver’s license, etc., from any device. They are then stored in Darwin’s electronic deal jacket.
• Signing: A single signing ceremony can happen in one place that includes all deal documents required.
Before activation users are required to attend a training webinar.
“JM&A Group leads the industry in Virtual F&I, which is further enabled by Darwin’s suite of products. The potential for time savings and new revenue streams through Virtual F&I is an exciting proposition for our industry as consumer preferences and buying habits shift,” said Scott Gunnell, group vice president of business strategy and operational excellence at JM&A Group.
“Advancements and widespread availability of digital tools like Darwin’s on-demand offering accelerate dealers’ success in the virtual space. By using these tools, dealers can advance their digital retail strategy and provide a consistent experience regardless of how or when your customers prefer to purchase,” Gunnell continued in a news release.
Darwin Automotive chief executive officer Phillip Battista added, “A fully virtual experience is what customers need and want right now and Darwin Documents on Demand is the final application that makes that happen. Even better, we are providing it at no cost as we appreciate the loyalty our customers have shown and want to thank them.
“Dealers just need to complete a short training webinar to ensure the most efficient usage. As COVID-19 is still impacting the market we are continuing to develop applications that enable dealers to profitably service their customers in a contactless way,” Battista went on to say.
Darwin Automotive currently operates in all 50 states with more than 6,300 dealerships subscribed to its programs. Darwin said it delivered 504,000 deals on its platform last month and is on track to deliver 6.5 million units for the year.
For more information, contact sales@darwinautomotive.com, call (732) 781-9010 or visit https://darwinautomotive.com.
DigniFi is looking to provide a financing option for dealership customers who might already be stretching their budget and then encounter a costly repair or other stumbling blocks to securing the necessary funds for vehicle delivery.
On Wednesday, the company expanded access to financial services for dealers with the launch of DigniFi ExpressWay, which includes a new revolving credit line and card that customers can use to make purchases in all five profit centers of the dealership, including F&I, sales, parts and accessories, service and collision.
ExpressWay can help dealers keep customers from walking away due to a lack of available funds. In addition, ExpressWay can offer access to special financing for up to six months on purchases of $350 or more.
And since terms are based on purchase amount, DigniFi pointed out that customers may be able to pay down their balances faster and incur less interest charges than with traditional credit cards.
“Our mission is to provide dealers with access to a point of sale financing solution so more of their customers can say ‘yes,’ to your dealer offers,” DigniFi chief executive officer Richard Counihan said in a news release. “We offer access to financing with flexible, affordable terms that drivers can feel good about. Our lender uses our advanced automotive analytics and instant online decision platform to provide the financing of thousands of car repairs, upgrades, accessories, and trade-ins every month. That's customers who no longer have to walk away from your dealership. Dealers pay a flat fee instead of a percentage of every loan.
Also, customers can use ExpressWay financing during multiple points in the vehicle sales process. Our service partners already enjoy revenue increases of up to 20% per year and we look forward to similar increases in sales and F&I,” Counihan added.
Frank Alvarez, operating partner at Premier Chrysler Dodge Jeep RAM of Buena Park, Calif., runs a busy franchised dealership that sells approximately 175 units per month and writes about 1,200 repair orders per month. The news release indicated Alvarez uses ExpressWay for both sales and service to help prevent customers from leaving due to a lack of funds.
The dealership just started using it in the sales department and is already enjoying an additional six to 10 new and used vehicle sales per month by having DigniFi ExpressWay available for their customers.
Service advisors and salespeople can share DigniFi point-of-sale materials with customers as well as text or email them a link to the DigniFi ExpressWay application. Customers can complete the application on almost any connected device. The customer needs a valid email address because all documents are signed electronically and emailed to the customer for their records.
“It is very simple for the customer to review the program information while they’re waiting for their vehicle estimate,” DigniFi said.
Customers receive a revolving credit line, as well as access to a cash advance feature whose proceeds can be used anywhere the customer chooses, even where the ExpressWay card is not accepted. Customers can receive a credit line up to $7,000. The minimum credit line is $350. They can use as much of their line as they like and since it’s a revolving line, they don’t have to reapply each time they use their account.
“DigniFi modernizes the vehicle sales and service process and our customers are thrilled that this option exists,” Alvarez said. “Frequently their only other option is a loan from their parents or aunt or uncle. Today it’s the Amazon world. If you want something you can get it the same day using Amazon Prime, and people are expecting that level of service from us.
“Our dealership wants to be forefront at instant gratification for our brands,” Alvarez said. “With the user-friendly DigniFi app we can send customers a link that allows them to share the details and discuss it with their relatives. It opens up a whole new avenue for them.
“We recently built a brand-new modern building with lightning-fast Wi-Fi, USB charging stations, high-end TV screens, you name it. ExpressWay is another fantastic technology option on the tail end of that which helps us beat out the competition,” Alvarez went on to say.
DigniFi added all loans are issued by WebBank, member FDIC.
For more information, visit www.dignifi.com/partners, call (855) 808-5861 or drop by booth No. 2893C at the 2020 NADA Show in Las Vegas on Feb. 15-17. To schedule a demo at NADA, go to this website.
On Wednesday, four leading executives from EFG Companies made their 2020 predictions and recommendations for the retail automotive and powersports F&I markets.
With what they see as potentially another flat year on the horizon, the EFG leaders predicted that the biggest changes will revolve around process improvements to better compete with industry disruptors and capitalizing on changing consumer purchasing habits.
Over the last few years, EFG acknowledged the auto industry has seen a significant number of disruptors enter the retail automotive space, from ride-hailing services like Uber and Lyft, to companies challenging the way people purchase vehicles, like CarMax and Carvana.
Now, the industry is at the beginning of a re-alignment with these disruptors and evolving consumer purchasing habits, according to the EFG leaders.
“The pace of change affecting the auto retailing industry today is unprecedented. However, it’s important to remember that the goal of the dealership hasn’t changed,” the company said. “The goal is still to sell vehicles profitably. The primary challenge facing dealers today is evolving their retailing process to capitalize on changing consumer habits.”
Utilizing its 40-year history in the F&I industry, EFG Companies offered the following predictions:
Online sales
“Consumers have been driving the need for dealers to invest in online sales models for the last few years. However, the technology just wasn’t there. We’re on the brink of automotive retail technology catching up with consumer demand. I believe over the next few years, we will see dealers more heavily invest in an online sales model. Aside from the logistics of completing a purchase online with the right technology solutions, the role of the BDC will change, hiring and training will change, and data security and fraud prevention will be top of mind.
—John Pappanastos, president and chief executive officer of EFG Companies, who elaborated more about his projections in this online video
Service drive investment
“On the service side, dealers have come to the realization that they need a different type of service advisor. Going forward, salesmanship needs to enter the mix of service manager requirements. The agents we work with are training service managers to answer the question, ‘Why get your work done with my dealership?’ This is a shift in mindset that requires ongoing training, pay plan changes, and creative customer service value-adds, such as door-to-door pickup and delivery, price matching on tires, and complimentary services. It includes streamlining basic services, like oil changes, to keep customers moving. And, it includes tech upgrades in the service center for advisors to provide more transparency and to communicate with customers in the manner in which they want to be communicated. A great example of this is the rise of sending customers video inspections of their vehicles.”
—Adam Ouart, vice president of agency services
Finance and lease creativity
“Over the last several years, dealers and auto lenders have pushed the boundaries of auto lending. We’re now seeing terms as long as 72 months, but auto payments still average more than $400. These boundaries were pushed to lessen monthly payments and make more expensive cars more accessible. However, that clearly isn’t working. If it was, used cars would not have such a strong market position across all credit tiers. Going forward, we can expect dealers to find creative ways to shorten terms and trade cycles. We’ll see more lease options with more granular terms to match consumer buying and driving habits. This need is also driving the rise of subscription-based models in the dealership.”
—Brien Joyce, vice president of specialty services
Five-year outlook
“Dealerships probably won’t look much different than now. The biggest changes dealers will have to make will be cultural and process-oriented. The first priority of all dealerships is to provide an exceptional customer experience. While this isn’t new, the stakes are higher. Going forward, dealers will have to adjust their sales model to enable customers to purchase their vehicle based on their own personal preferences, whether that’s online, over the phone, or in the showroom. To incentivize more foot traffic, dealerships will become more attractive places to visit. You’ll see greater concierge services, like vehicle delivery and pickup, and the dealership will become a place that allows the dealer to build a community.
—John Stephens, executive vice president of EFG Companies
Amid all of the Black Friday retail activities, RouteOne announced that CRB Auto is now an available eContracting finance source for dealers utilizing the RouteOne platform.
The companies reiterated that eContracting can enable the digital exchange of critical contract documents and data between dealers and finance sources to increase efficiency and reduce contracts in transit.
RouteOne said it now has more than 8,800 active eContracting dealers and more than 80 finance sources in its rapidly growing eContracting customer base. RouteOne is an industry leader in eContracting, with more than 75% of its credit application volume now available to be eContracted.
“We are proud to welcome CRB Auto and bring our dealers yet another available eContracting finance source,” said Jeff Belanger, RouteOne’s senior vice president of business development.
Belanger continued in a news release, “eContracting is rapidly becoming the industry standard and RouteOne is proud to support our owners and customers in leading the charge with our robust offering of features, finance source availability and dealer utilization.”
CRB Auto chief executive officer Bill Katafias added, “CRB Auto’s digital contracting solution will improve convenience, efficiency and speed for our dealer clients through RouteOne.
“In the future of indirect auto, eContracting will let us more easily manage contracts and share key information with our dealer clients,” Katafias went on to say.
Dealers interested in eContracting should contact their RouteOne business development manager at (866) 768-8301 or www.routeone.com/salesteam.
Strategic sessions and honoring its best performers highlighted the latest event hosted by EFG Companies.
The company recently held its annual Agent Council when agents from across the U.S. gather to discuss industry trends, current business challenges, best practices and new product innovation.
Going into 2020, the company highlighted that agents are primarily focused on helping dealers compete in an industry where profit margins continue to tighten and fortify their customer retention models.
“As we’ve seen over the last few years, agents are evaluating how to restructure their agencies to better serve their dealer clients and support a larger dealer book of business,” said Adam Ouart, vice president of agency services at EFG Companies.
“It’s become clear that the true differentiator for agents is transparency, partnership and engagement,” Ouart continued in a news release. “However, creating a business culture around these values takes more than a pep talk. We’re seeing agents invest heavily in training for their own teams, as well as training for their dealership partners.”
As agents implement policy and process improvements, EFG acknowledged they are also working with dealerships to improve their own service models, especially in the service drive. This includes training service managers on both customer service and sales, recognizing the fact that a service manager has a much bigger opportunity to close more customers on small, credit-card-sized F&I products tailored to specific individual needs.
In addition to discussing the path forward, EFG also recognized two agents for their demonstrated success in 2019.
Empire Dealer Services was given the Top Agent Award. This award is determined by overall performance, effective training, and comprehensive achievements throughout the year.
Heart Dealer Services was recognized with the EFG Rising Star Award. This award was created to recognize the achievements of those agents who made the largest strides when it comes to improving their value proposition with their dealer clients.
Hosted annually, EFG’s national Agent Council is designed to provide a collaborative environment in which agents can formalize their strategies to better serve their dealer clients, improve F&I performance, and increase dealer profit. This year, EFG’s premier agents from across the United States attended a four-day roundtable in the Bahamas.
