Paul McCarthy returned for another episode of the Auto Remarketing Podcast, this time as vice president of sales, key accounts, at Protective Asset Protection.
McCarthy took time during NADA Show 2023 in Dallas to share his perspectives on the current F&I landscape and why it’s important for dealers to present products before vehicle buyers are “in the box.”
To listen to the conversation, click on the link available below.
Download and subscribe to the Auto Remarketing Podcast on iTunes.
Executives from 700Credit recently released QuickScan, a mobile document verification and fraud detection platform that can provide dealerships with real-time confirmation of the legitimacy of a customer’s driver’s license and identity.
The provider of credit, compliance, soft pulls and identity verification and fraud detection solutions said QuickScan can be particularly helpful when used to verify the identities of remote vehicle buyers. It also can be utilized in the store.
Ken Hill, managing director of 700Credit, explained this tool can be combined with the best practice of a soft pull prescreen which will deliver a more complete “picture” of the consumer.
Here’s how it works.
QuickScan sends a secure link to the consumer’s mobile device that walks them through the process of taking a picture of the front / back of their driver’s license, along with a selfie image. Their identity is then validated (or invalidated) in real time and the results are available in both 700Credit’s web portal and our mobile application.
“According to the Federal Trade Commission (FTC), retail businesses lose billions of dollars annually when fraudsters purchase or return goods by using counterfeit driver’s licenses as identity. Fraudsters have become increasingly sophisticated and are able to replicate driver’s licenses, that are NOT embedding state-of-the-art security features implemented by individual States,” Hill said in a news release.
“The QuickScan platform will help dealers detect fraud at the top of the sales funnel to protect their dealerships,” he went on to say.
To learn more, visit https://www.700credit.com/identityverification/quickscan.
As experts from firms such as Edmunds have discovered, many consumers are committing to a monthly vehicle payment of $1,000 or more.
Becky Chernek of Chernek Consulting made her monthly visit for the Auto Remarketing Podcast to go over the value of refinancing and other F&I strategy that can help all dealerships.
To listen to 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
This week, Protective Asset Protection, a leading provider of F&I programs, services and dealer owned warranty company programs, released of its third F&I Industry Report.
The project offered an in-depth look at four crucial topics, including:
—Trends and insights shaping F&I products
—How auto dealerships are using F&I products
—Outlook of F&I products used by dealerships for the balance of the year
—Spotlight on F&I products being used in specialty, RV, marine and powersports industries
Protective, which recently celebrated 60 years of service in automotive and 30 years of RVDA’s exclusive service contract endorsement for XtraRide, highlighted that this report is designed to specifically address the current landscape of F&I products in the marketplace, and to provide an overall view of how these products are performing for dealers across the U.S.
The report also detailed specific market challenges and opportunities, feedback from dealers across the U.S., and F&I product growth opportunities.
Key F&I product trends
According to research from the report, over the past year, more dealers are selling F&I products such as vehicle service contracts, appearance products, tire and wheel protection, prepaid maintenance and GAP coverage.
In fact, Protective indicated the majority of dealers say their F&I sales are up between 5% and 10% compared to the previous year.
The report found that most dealers today are selling F&I products such as tire and wheel (73%), exterior appearance products (72%), GAP coverage (68%) and vehicle service contracts (66%).
Protective noted that dealers say there are a handful of ways they can sell even more F&I products, including the ability to provide access to online financing (56%), offering F&I products that help with vehicle affordability (53%) and F&I products that are more geared toward the sale of used vehicles (48%).
How F&I helps dealers compete in today’s economy
For many dealers, Protective point out that F&I programs include vehicle service contracts, guaranteed asset protection and ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft and powersports vehicles.
In addition, dealer participation programs, training and technology solutions are also vitally important to dealers’ success.
To help dealers continue to succeed, the report reinforced the position that having a complete and robust set of solutions as well as a network of industry professionals with the expertise to help navigate the changing environment is a must.
Growth of F&I for electric vehicles
The report illustrated how the growth of electric mobility will have far-reaching impacts for dealers, touching virtually every aspect of their business.
From the need to reevaluate the retail process to the adoption of new operating procedures, Protective acknowledged that there is a lot to consider.
Rick Kurtz, senior vice president and chief distribution officer of Protective Asset Protection Service, explained in a news release that operations will need training to service high-voltage powertrain systems, while frontline sales staff will be expected to competently answer consumer questions and close the sale.
Kurtz added that electric vehicles also tend to have fewer mechanical parts that break down but tend to come with an expansive amount of technology, which has significant implications for after-sales service.
“Dealers and their F&I departments today are equipped with the most advanced F&I products and online resources to better serve their customers through increased availability of F&I programs and offerings via digital retail channels,” Kurtz said.
“Regardless of economic or industry challenges that may lurk around the corner, Protective is committed and excited about the prospects of providing further education and training to our dealer partners, along with the products and tools they need to serve their customers and continue to be profitable,” he went on to say.
The entire report can be downloaded via this website.
Principal Warranty Corp. recently added a new dealership client that knows luxury well.
Now leveraging the provider’s products is Fletcher Jones, which has dealerships in California, Nevada, Hawaii and Illinois and is one of the national sales leaders among Audi and Mercedes-Benz retailers.
“We looked at a number of different companies to partner with when starting our reinsurance company. Principal Warranty Corp. was absolutely the best fit for us. We feel like their customer-centric approach to the business mirrors our values as a company,” Fletcher Jones chief operating officer Fletcher Jones III said in a news release.
“Also, the ability to collaborate in the design rather than having to take the off the shelf product was important to us. We have been more than pleased with the roll out and partnership and look forward to our continued success,” Jones continued.
The dealer group now has access to Principal Warranty’s full suite of F&I products that include exclusionary and comprehensive mechanical service contracts, lifetime and limited warranty programs, GAP, ancillary plans, reinsurance programs, dealer development and compliance training.
“The idea of doing things right, no matter what, was an initial draw for both our companies. Then realizing that empowering people and providing world class customer service was a driving factor for both of us, it proved to be a fantastic match,” Principal Warranty president and chief executive officer Travis Coulter said.
“Partnering with an organization the caliber of Fletcher Jones is a responsibility we embrace and together both our teams look forward to a long and prosperous relationship,” Coulter added.
As one subsidiary of Westlake Technology Holdings posted records in the vehicle leasing space last year, another of its subsidiaries that specializes in shared cash flow auto lending generated new company records in 2021, too.
According to a news release, Western Funding compiled record growth in portfolio payouts, loan portfolio, loans originated and producing dealers for 2021.
Those new high-performance metrics include:
— $3.5 million in portfolio payouts to over 200 participating dealers
— 100% adoption of e-contracting
— 52% year-over-year growth in its loan portfolio
— 49% year-over-year growth in loans originated
— 47% year-over-year growth in producing dealers
“These successes are a testament to Western Funding’s focus on improving its programs, reducing funding time, and making the loan origination experience better for all participating dealers,” Westlake Technology Holdings group president Ian Anderson said in the news release. “We are looking forward to 2022 and anticipate another impactful year of growth for WFI.”
Additionally, Western Funding explained how it adopted a set of values designed to solidify a culture critical to meeting long-term business objectives. The values, referred to by the acronym FASTER, are:
Fun
Accountable
Strategic
Team-oriented
Efficient
Respectful
By implementing these values into its day-to-day operations, Western Funding said that it will continue to create value for participating dealers and consumers.
“I’m extremely proud of the entire Western Funding team,” Western Funding president Jim Murray said. “Building a solid culture is hard but our team recognizes that an investment in a strong culture will increase the likelihood of delivering the innovation needed to better serve our customers in the future.”
Western Funding said it expects continued growth in 2022 by continuing to improve its program, adding near- prime and prime credit segments and reaching out to new dealer segments.
The company added that it will also introduce a formal program this year designed to recognize and reward its top dealers.
For more information, visit www.westernfundinginc.com.
The industry has seen more than its fair share of changes since the beginning of 2020. With much of the country on lockdown early in the pandemic, dealers were forced to expedite their digital retailing operations, enabling consumers to not only research for a new vehicle from the comfort of their home, but also have the power to secure financing, protection programs and complete transactions of the purchase without leaving their home.
This brought about great changes in the way people conducted research and made selections of the F&I products they chose for their new cars. When factories shuttered, placing disruptions to the supply of new cars and trucks, millions of people turned their attention toward used vehicles, making the selection of F&I products such as vehicle protection plans even more important.
Continued challenges for the industry
Now as the industry finds itself speeding toward the final months of 2021, many challenges continue to exist. While the promise of vaccinations has eased the fear of the pandemic, consumers, retailers and lenders continue to build on the momentum of digital retailing, especially with the threat of the Delta variant growing each day.
Further supply challenges for new vehicles from semiconductor chip shortages as well as other critical parts and supplies have also continued to place a strong emphasis on used vehicle inventories throughout the year.
Different vehicles on the lot mean different F&I needs
These continued changes have further reshaped not only the way people shop for vehicles, but also the type of vehicles they’re shopping for. As a result, the type of F&I products they’re seeking out at the dealership have also undergone a shift, and dealers need to realize how these changes in preference reshape which F&I products they carry in their portfolio.
In a recent survey to more than 2,000 F&I managers and dealership executives, approximately a quarter of respondents said the sale of F&I products to customers has increased between 5% and 10% so far in 2021 compared with 2020.
The pandemic created an opportunity for dealers and their F&I departments to offer more digital tools when customers are researching and selecting F&I product options for the vehicles they are shopping for. Forty-five percent of dealers now make F&I product information available online, followed by financing options/loan application online (35%), and F&I product selection and pricing online (33%).
Other key highlights of new F&I product trends:
• 44% say the ability to adjust products offered based on a customer’s needs are most needed to sell F&I products online; followed by the ability for customers to select product and coverage options (41%), and online tools like videos to explain product benefits (38%).
• 42% say increased coverage for existing protection products such as VSCs would be the most impactful to improving F&I product sales; followed by a more diverse set of F&I product options (41%), and more F&I products designed specifically for used vehicles (37%).
• 38% say selling F&I along with increased transaction prices represent the biggest opportunities in selling F&I products today versus pre-pandemic; followed by longer loan terms (37%), and more EV/plugin sales (36%).
Most F&I products have remained somewhat stable in terms of the breakdown of what was sold pre-pandemic versus today. However, the largest jump since the pandemic began has been identified in theft-deterrent systems. Twenty-one percent of dealers reported selling these systems prior to the pandemic, and today this number has jumped to 31% of dealers. This is mostly because many cars, even after purchase, are remaining parked at home as more people work from home today or continue to work in hybrid home/office settings and seek extra security for their vehicle
Digital retailing also reshapes the F&I lineup
Along with these changes in F&I product focus, a greater emphasis on digital retailing, online shopping, used vehicle and EV/hybrid product sales, means a larger number of dealers are looking for ways to maximize their opportunities in offering F&I products that cater to these shopper needs. Expanded F&I product lineups, customized product offerings and additional F&I product education for both the dealer and their customers are all growing in importance for today’s transaction-focused environment.
America looks vastly different today compared to just a few short years ago, especially with the way we shop for everything — including cars and trucks. Because of this, consumers have quickly adapted to the new ways in which they customize their vehicle purchase and that includes the F&I options they select on their vehicles during the shopping phase. As more dealerships embrace this change and leverage flexibility, agility and a changing F&I product makeup, they will not only sell more vehicles but they’ll also sell more F&I product options that truly satisfy their shoppers’ needs.
Travis Wools is vice president of marketing for Protective Asset Protection. A marketing and communications veteran, Travis has 14 years of automotive industry marketing experience, as well as background in market research, digital media and advertising. For more information, visit www.protective.com.
Dealers who are itching to grow their business now might be able to secure more affordable resources from Westlake Capital Finance (WCF).
The Westlake Technology Holdings subsidiary announced last week that qualified dealers can be approved for new commercial real estate lending rates as low as 3.99%.
WCF launched its commercial real estate lending program in late 2019 and is currently offering rates as low as 3.99% to qualified Westlake dealers in California.
WCF intends to expand this new program to additional states within the next year, according to a news release.
“We are thrilled to announce this exciting new offer,” said Lauren Barnard, director of commercial real estate lending at Westlake Capital Finance.
“Our program continues to evolve in response to fluctuating market and industry conditions, and we remain committed to providing our dealers with affordable, creative and customizable solutions designed to yield tangible results and growth for their respective businesses,” Barnard continued in the news release.
The announcement also highlighted that these new rates will give existing Westlake dealers the opportunity to successfully grow much faster by benefiting from a lower cost of capital. With rates as low as 3.99%, the company said it’s now much more affordable for dealers to buy, build, refinance and expand their business.
Westlake mentioned that dealers also can leverage their real estate equity to invest in a new location or to tackle large renovation and maintenance projects that may have been on the backburner.
“Westlake is always looking for new and innovative ways to support our dealership partners,” said Todd Laruffa, vice president of WCF. “This is an excellent opportunity to have Westlake become a strategic partner in our dealers’ business.
“Not only can we offer commercial real estate financing, but our partners also have access to the full suite of Westlake’s products and services. Lastly, with our new low-rate tiers, our hope is to make it easier for our dealer partners to have access to low cost of capital and the industry expertise needed to facilitate growth in their business,” Laruffa went on to say.
Dealers interested in learning more about Westlake Capital Finance can call (888) 682-0166 or visit www.westlakefinancial.com/other-finance-solutions/wcf-commercial-real-estate.
StoneEagle F&I senior vice president of business development Joe St. John made his monthly appearance on the Auto Remarketing Podcast to discuss what’s happening in dealership finance offices.
Senior editor Nick Zulovich asked about which elements helping F&I departments this year could be sustained and which ones might be unique to 2021.
To listen to the episode, 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.
Plenty of exciting football action is on the docket this weekend with multiple Top 25 matchups in the college realm and Tom Brady playing his first NFL game against the New England Patriots.
Flagship Credit Acceptance is leveraging the enthusiasm for football with its newest promotion to help dealers celebrate this year’s college and NFL football season with a little friendly competition that is all about getting back outdoors, enjoying the fall weather and creating the ultimate tailgating experience.
Through a campaign called Any Given Saturday, Flagship Credit Acceptance will award one dealer in each of the finance company’s nine regions across the country with premium tailgating prizes every week. All dealers that are eligible for promotions can compete against other dealers in their area.
According to a news release, weekly winners will be selected based on the largest week-over-week increase in applications, enabling any store to win. The winning dealership will be awarded premium tailgating prizes that include Yeti coolers, Apple AirPods, portable smart speakers and other tailgating essentials.
Each week, a new prize will be awarded to one dealership in each region. The competition begins every Sunday and runs through the following Saturday. The winners will also be highlighted across Flagship’s social media channels the following week.
“We are excited to see the auto industry strengthening, and while dealers still face several lingering challenges from the pandemic, we felt it was important to reinforce that we are here to help them be successful,” Flagship Credit Acceptance president and chief operating officer Jeff Haymore said in the news release.
“Any Given Saturday is a great way to show our support through a fun and rewarding competition.”
To learn more about Flagship Credit Acceptance, visit www.flagshipcredit.com.
