The Industry's Leading Source For F&I, Sales And Technology

F&I Dealer of the Year


Setting the Pace

September 2013, F&I and Showroom - Cover Story

by Editorial Staff

For as many differences as there are, this year’s F&I Pacesetters also share a host of commonalities in terms of their approach to performance, customer satisfaction and compliance. Each of them is now vying for F&I and Showroom’s coveted F&I Dealer of the Year award.

This year’s field consists of two operations from Ohio, two from Texas, and one each from Missouri and Utah. Each operation boasts active management teams, payplans that balance performance with customer satisfaction, and multi-layered compliance procedures. They each talk about quality of life when it comes to their employees, one of the reason’s this year’s F&I Dealer of the Year finalists boast long-tenured producers and low turnover rates.

Then there are the differences. This year’s field includes an operation that’s combined the roles of sales and F&I, but did so while bulking up its compliance checks and balances. Another operation posts interest rates in the showroom to be more transparent to customers, while another served as GM Financial’s pilot dealership when it launched its leasing product back in 2011. Another finalist was named “Best of State” in Utah.

The following profiles offer an insider’s look at this year’s F&I Pacesetters and the people who lead them. One of these operations will be named F&I and Showroom magazine’s 2013 F&I Dealer of the Year during a special lunchtime ceremony on Tuesday, Sept. 17, at 12 p.m.

Pictured are F&I Directors David Nichols and Bob Manson of the Cable Dahmer Automotive Group, located in the Kansas City, Mo., area.
Pictured are F&I Directors David Nichols and Bob Manson of the Cable Dahmer Automotive Group, located in the Kansas City, Mo., area.
Cable Dahmer Automotive Group

Background Check: Under the leadership of Dealer Carlos Ledezma, the Missouri-based, four-rooftop dealer group operates two Chevy stores, a Buick-GMC-Cadillac franchise and one auto outlet for used cars. Cable Chevrolet was founded in 1957 in the Kansas City, Mo., area, and later merged with Dahmer Chevrolet in the 1970s. Last year, the Chevy group expanded when it acquired a Buick GMC Cadillac store, which has since doubled in volume.

The Numbers: Cable Dahmer averages about 560 units per month between new and used across all of its dealerships. Profit per retail unit (PRU) sits at $1,295 on new and $1,309 on used. Finance penetration for the store is at 76 percent, while service contracts penetrate at a rate of 48 percent. GAP penetrates at a 52 percent rate, while tire and wheel, theft and fabric protection penetrate at 17, 12 and 10 percent rates, respectively. Total annual gross revenue for the group is $32 million, with the group’s F&I operations accounting for $7.79 million of that total.

Compliance Check: The group takes a proactive approach to compliance, grading all deliveries from the previous day for consistency and performance. This goes for sales managers, salespeople and F&I managers.

“If there’s a problem or an issue, we can see, ‘Is this salesperson lacking a certain piece of knowledge?’ From there, those are key areas that are going to kick up immediately rather than waiting until the end of the month,” says F&I Director Bob Manson, who oversees the group’s F&I operations.

Compliance inspections for all variable and fixed operations are conducted monthly by Automotive Compliance Corp. Deals are also reviewed monthly by Southwest Dealer Services. Findings are discussed during the group’s once-a-month roundtables. “We hold everyone accountable to their peers,” Manson says, noting that all F&I producers are certified with the Association of Finance and Insurance Professionals. “Accountability means so much here.”

The dealer group also places compliance managers at each location. They report to a corporate compliance officer. F&I managers are also video-recorded every six weeks to ensure compliance. The videos double as a compliance check and training tool.

Secret Weapon: Cable Dahmer’s philosophy is that employees should have room to grow and thus a reason to stay. That’s been the case for Manson, who took on the role of corporate F&I director last year after 19 years with the dealer group. It’s a long time to be in one position, he says, but it never gets stale. The group also recognizes employees for their loyalty to the company, several of whom have spent more than 10 years with the group.

What really drives the group’s success is the trust it places on employees. Financial statements are made available to all department heads, who collectively evaluate expenditures as well as spot areas needing improvement.

Industry Accolades: Chevrolet ranked Cable Dahmer No. 53 for U.S. retail sales in 2011. Ingram’s magazine ranked the dealership as the Top Minority-Owned Business in Kansas City, and the store held the No. 1 spot for market share in Kansas City from 1996 to 2011.

First Texas Honda switched to a hybrid manager model in 2010. The change led to a $200 jump in the F&I department’s average profit per retail unit.
First Texas Honda switched to a hybrid manager model in 2010. The change led to a $200 jump in the F&I department’s average profit per retail unit.
First Texas Honda

Background Check:  The Austin, Texas-based dealership is part of Continental Automotive Group, which originated in 1964 as Continental Cars and now consists of four dealerships, a collision center and wholesale parts facility. The Honda store stands as the only remaining locally-owned, family-operated Honda dealership in the city.

The Numbers: First Texas Honda’s F&I department recorded about $3.7 million in F&I revenue last year. The dealership’s finance penetration sits at 80.4 percent, while service contracts penetrate at a 45 percent rate. GAP, paint and fabric protection and tire and wheel penetrate at 44, 27 and 15 percent rates, respectively.

Secret Weapon: In 2010, the Honda store, which averages about 400 retail sales per month, switched to a hybrid manager model — combining the roles of the salesperson and F&I manager. Now, three years later, the dealership’s PRU has jumped $200 to $900 per copy.

Beau Barrett is the senior sales team leader of the store. He oversees the 13 elite product specialists (EPS), or hybrid managers, who handle deals from start to finish. The key to this hybrid process is the store’s no-haggle vehicle pricing, which sets the table for the F&I side of the store’s hybrid process.

“We’ve found that [our product specialists] have built more of a rapport with customers than our traditional F&I contractors,” Barrett says.

In fact, product specialists sell more products per deal, averaging $989 in PRU vs. the store’s traditional F&I producers, which average $900 per copy. Not only are the numbers adding up, but Barrett notices a higher level of customer satisfaction. “When we [administer surveys], I see a lot less of ‘It took forever’ and ‘I was there for six hours’ comments,” he notes.

Compliance Check: First Texas Honda’s hybrid approach consists of a three-step process. In addition to the traditional salespeople and the F&I-trained product specialists, the dealership employs a team of part-time document processors. These individuals will complete and review each deal, allowing the EPSs to focus on the selling aspect. The document processor position also creates a dedicated method to ensure high standards in terms of compliance.

Industry Accolades: First Texas was listed in the Austin American-Statesman’s “Top 10 Places to Work in Austin” for 2011. The dealership also earned the Honda President’s Award.

Setting the Pace: First Texas’ hybrid process, which was designed by American Financial and Automotive Services Inc., has caught the attention of Dealer 20 Groups and even Honda senior executives like John Mendel. “We have a lot of dealerships coming in from all over the country just to see what’s going on,” Barrett explains, praising the efforts of Tony Dupaquier, director of F&I training for American Financial.

When the Honda store’s Assistant General Manager Andrea Baker introduced the idea a few years ago, Barrett recalls it didn’t go over well. “She was the one sitting in the room with everyone in their suits and ties laughing at her. I guess you can say she got the last laugh,” he says. “We’re setting records, and these people are calling us back now wanting to take notes.”

F&I department members Joe Benson, Lisa Bourgeois, Jason Frampton and Jim Hutson stand outside the Ken Garff corporate office in Salt Lake City.
F&I department members Joe Benson, Lisa Bourgeois, Jason Frampton and Jim Hutson stand outside the Ken Garff corporate office in Salt Lake City.
Ken Garff Automotive Group

Background Check: Ken Garff founded his automotive business more than 81 years ago in downtown Salt Lake City after the service station he worked at closed for repairs. Today, the Ken Garff Automotive Group boasts more than 40 stores in six states and generates more than $1.5 billion in annual sales.

The Numbers: The dealer group reports an average PRU of $1,352 on new vehicles and $1,015 on used. Penetration for GAP stands at 58 percent, while theft protection sits near 54 percent. These rates far outpace service contract penetration, but Danny Cox, the group’s corporate F&I director, says that is changing.

When Cox came to the dealer group eight years ago, service contracts were penetrating at a rate of about 29 percent. Now, he expects to finish out the year at around 49 percent.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  


So Here's the Deal

Ronald J. Reahard
Sharing the Profit

By Ronald J. Reahard
After losing members of his sales team, a dealer asks the magazine’s resident F&I expert for his take on paying salespeople on F&I income.

Menus Don’t Work Miracles

By Ronald J. Reahard
A fancy new menu can help streamline processes and improve customer engagement, but it won’t replace the hard-won skill and compassion of a true F&I professional.

Avoiding the AAA Objection

By Ronald J. Reahard

(Video) Capture Missed VSC Sales

By Ronald J. Reahard

Done Deal

Gregory Arroyo
GAP Suffers Another Setback

By Gregory Arroyo
The editor reveals the truth behind an NPR report critical of the industry’s efforts to undo the Military Lending Act guidance that put the brakes on GAP sales.

Car Buyers Need F&I

By Gregory Arroyo
Current market trends are playing right into the F&I product pitch, but they also reveal trouble ahead for the automotive retail industry at large.

Protecting F&I’s Future

By Gregory Arroyo

Game Almost Over

By Gregory Arroyo

Mad Marv

Marv Eleazer
Comply Like Nobody’s Watching

By Marv Eleazer
His Madness wants F&I pros to commit to ethical dealings with customers and finance sources because it’s the right thing to do, not just for the very real threat of reprisal.

'We Never Buy This Stuff'

By Marv Eleazer
Every F&I pro gets the occasional ‘F’ customer, but they’re a small part of your business and they’re not worth a minute of mental anguish.

Stop Painting Dealers With a Broad Brush

By Marv Eleazer

I Love F&I. How About You?

By Marv Eleazer

On the Point

Jim Ziegler
Bound to Fail

By Jim Ziegler
Da Man returns with a message to vehicle manufacturers jumping into the subscription waters: It ain’t gonna happen.

Sharpen Your Survival Skills

By Jim Ziegler
‘Da Man’ has a plan you can use to survive the collapse of the car business and remain profitable through the dealer apocalypse.

Sales Rock Stars Still Exist

By Jim Ziegler

The New Stooges

By Jim Ziegler