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AutoNation Takes Payment Quoting to the Sales Floor

August 2006, F&I and Showroom - Feature

AutoNation Inc. has created a policy for its dealerships to present payment options on the showroom floor during the vehicle selection process. This change is an effort to meet customers’ demands for payment quotes before reaching the F&I office, according to Kevin Westfall, senior vice president of sales for AutoNation.

Westfall talks with F&I Management & Technology’s Senior Editor Kristen Force about the menu, called Smart Choice, and why the company expects it to be mutually beneficial to the dealership and customers.

Please explain how the Smart Choice menu works.

The importance of the menu is to get away from the 4-Square and for us to be transparent with customers on the front end. It summarizes the deal and has all the customer information at the top. It gives them the different purchase options, both finance and lease. It starts with the base MSRP of the vehicle and goes through the various discounts (manufacturer discount, store discount, rebate, etc.) and it has the final price of what they’re buying.

How will this improve transparency?

Historically, stores have not told a customer directly: “The car lists for $36,000 and I’m selling it to you for $29,000.” It’s almost never been done. There’s no explanation for how they got down to that price. So, we take them through that and then we detail their trade-in and explain, “Well, the base value for your car may be $7,500, but we need to recondition it and it needs new tires and/or a body panel needs to be repainted. It will be $1,000 less for reconditioning and you have excess miles, so that will be an additional $500 reduction. So, we’re willing to buy the trade-in for $6,000.”

This transparency empowers customers and instead of historically being kind of in the dark, they now have everything at their fingertips. They can fully understand how we arrived at a number and if they want to discuss it or negotiate it, it’s right in front of them.

When is the menu shown to the customer?

Our goal is to present it whenever the customer wants or asks for it. In the typical sales process though, it would be after they’ve done a test drive.

Customers are required to circle the payment they’ve chosen on the page. Obviously, if they negotiate, we re-run a new menu off the new price and then they circle which payment they want to have. When customers look at the F&I menu, that payment will be in the top left corner — it’s very transparent.

How does this help the F&I department?

It makes the finance process significantly easier. The customer is now fully committed to the car and knows what the payment will be. He knows all the parameters and there is nothing hidden. It takes a lot of the apprehension and distrust away because now you’ve had this open, transparent interaction, creating more honesty and higher integrity.

How are payment options presented before a credit report is pulled?

When a customer has agreed to a vehicle and says, “Yes, this is the car I’d like if we can come to terms,” then the sales force says, “Great, I can give you some payment options. We run our payment options based on average credit at our store.” If customers want the payments to reflect their specific credit, a credit report must be pulled. But we are more than happy to give them a menu based on average credit.

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