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F&I Dealer of the Year

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F&I Dealer of the Year: Mr. D's Way

When F&I Dealer of the Year Mike Dunnahoo arrived in Abilene, Texas, 18 years ago, he didn’t just take over a dealership, he adopted a community.

November 2017, F&I and Showroom - Cover Story

by Gregory Arroyo - Also by this author

Dealer Mike Dunnahoo poses with F&I Manager Jeremy Johnson and longtime F&I Director Jeff Zinsser, who has been with the group for 22 years. Missing is F&I manager Dan Hall, who has been with Star for 11 years. The team averages $1,872 per copy on new and $1,542 on used.
Dealer Mike Dunnahoo poses with F&I Manager Jeremy Johnson and longtime F&I Director Jeff Zinsser, who has been with the group for 22 years. Missing is F&I manager Dan Hall, who has been with Star for 11 years. The team averages $1,872 per copy on new and $1,542 on used.

Mike Dunnahoo remembers the moment well. It was the day he stepped through the doors of his new dealership and out from a 27-year, sometimes nomadic career in the car business — one that saw him go from the showroom floor to dealer at one of the Top 100 Buick dealerships in the country, to starting over again as a used-car manager and then traveling the country as a wholesaler.

“I walked in the door here on Aug. 6, 1999,” he says. “The timing was right, and I was ready to settle down and quit traveling so much, working auctions.”

“Here” is Star Dodge Chrysler Jeep Ram/Hyundai, which was just a Dodge store when he and Wichita Falls, Texas, dealer Harry Patterson purchased it 18 years ago.

“I think everybody has concerns,” he says when asked if he felt nervous the day he stepped into the dealership. “But as long as you surround yourself with good people — and I’ve always felt successful at doing that — that want my job, that I train them right, that are competent, that everything would take care of itself.”

Dunnahoo and his group are the winners of this year’s American Financial & Automotive Services-sponsored F&I Dealer of the Year award. The honor is based on the group’s F&I performance and the dealer’s success in the business. But Dunnahoo’s accomplishments go well beyond his ability to move the metal.

“Mike has a great reputation in the industry of being an outstanding dealer that always takes care of his customers, and is a huge support to the community,” says Arden Hetland, president of American Financial & Automotive Services. “He also takes care of his employees. We need more dealers like that.”

The Un-Metro Metro Market
Abilene (pop. 121,721) is home to three private colleges and Dyess Air Force Base. It’s about 150 miles west of Fort Worth in the center of a 22-county area commonly referred to as the “Texas Midwest” or “Big Country,” providing Star with a huge radius from which to pull customers.

Posing with Mike Dunnahoo and Jeff Zinsser is another critical member of Star Dodge Chrysler Jeep Ram/Hyundai’s management team, Tracy Gilliam. He became general manager of Star about 15 years ago after separating from a group in Fort Worth, Texas. He was introduced to Dunnahoo, who takes pride in his hiring, and the two immediately connected.
Posing with Mike Dunnahoo and Jeff Zinsser is another critical member of Star Dodge Chrysler Jeep Ram/Hyundai’s management team, Tracy Gilliam. He became general manager of Star about 15 years ago after separating from a group in Fort Worth, Texas. He was introduced to Dunnahoo, who takes pride in his hiring, and the two immediately connected.

Dunnahoo remains active in all facets of his business, chiefly stationed in the sales tower but ready to take a turn in the F&I office for a longtime customer.

“It starts at the top with me, Tracy [Gilliam], my general manager, and Jeff [Zinsser], my F&I director — with our integrity. That’s something we’re not willing to negotiate,” Dunnahoo says. “We’re not willing to go into a gray area and manipulate a car deal just to get a car deal. Does it cost me business? Absolutely.”

Dunnahoo started in the business in September 1972 on the lot of Ryan Oldsmobile Mercedes in Fort Worth. A year later he was working for John David Moritz’s Cadillac-Oldsmobile dealership in Arlington before General Motors split the two franchises in 1979.

“David Moritz kept Cadillac, and Don Davis took the Oldsmobile side of it. Both of them were backed by Bob Moore in Oklahoma City,” he recalls. “Everybody wanted to go to Cadillac and Don really needed some depth with Oldsmobile. So I stayed and became his general manager.”

In 1984, Dunnahoo signed on as a minority investor in a Buick store in Tulsa, Okla. It became one of the top franchises in the country — until the price of oil collapsed from $27 to $10 a barrel in 1986. That event preceded the crash of stock markets around the world on Black Monday, Oct. 19, 1987.

“We parted companies, and I started over,” Dunnahoo recalls. “I went from being a dealer at one of the top 100 Buick dealers in the United States to starting over as a used-car manager at Sam Lingard Ford in Bedford, Texas.”

He also worked as general manager of a Chrysler store Lingard purchased before deciding to go out on his own as a wholesaler in 1991. He did that for eight years, with Patterson, who was the used-car manager when Dunnahoo joined Moritz’s Cadillac-Oldsmobile store in the early ‘70s, floorplanning his operation. In exchange, Dunnahoo agreed to help out at Patterson’s Wichita Falls operation once a month, working the desk, conducting physical inventories, appraising cars, or anything else he needed.

“I was his first assistant manager,” Dunnahoo says of Patterson. “He kind of groomed me and taught me the business. So I owe a lot of this to Harry.”

Patterson, however, wanted Dunnahoo to go into some partnerships with him. They looked at four or five different stores, none of which seemed like the right fit. Then the deal for the Abilene store came along.

“When I walked in the door then, we had already struck a deal,” Dunnahoo says. “So there wasn’t any looking back.”

People, Process, Profit
A consummate salesman with the gift of gab, Dunnahoo had Star’s front-end operations covered. He just needed someone to handle F&I. “My long suit has always been in the front end,” he says. “I’ve always tried to hire good people for the back end to cover me and make me look good.”

Pictured are members of Star Dodge Chrysler Jeep Ram/Hyundai’s sales team. They include (l-r) Tony Rodriguez, Internet Sales Consultant Steve Sheppard, Rodney Hester, Chris Ramos, Sales Manager Jared Jackson, Jeff Boyles, General Manager Tracy Gilliam, Daniel Bullard, Dealer Mike Dunnahoo, Hector Montalvo, Melissa Boyd, Rusty Bullard, and Sales Manager Cory McGee.
Pictured are members of Star Dodge Chrysler Jeep Ram/Hyundai’s sales team. They include (l-r) Tony Rodriguez, Internet Sales Consultant Steve Sheppard, Rodney Hester, Chris Ramos, Sales Manager Jared Jackson, Jeff Boyles, General Manager Tracy Gilliam, Daniel Bullard, Dealer Mike Dunnahoo, Hector Montalvo, Melissa Boyd, Rusty Bullard, and Sales Manager Cory McGee.

The answer was already working at Star in Zinsser, but it would take Dunnahoo and his now F&I director a couple of years to come to that realization.

Zinsser, who started working for Star Dodge in April 1995, was about two years into his F&I career when “Mr. D,” as he calls him, arrived. Everything he had heard about his new dealer was positive, but Zinsser, who was 30 at the time, knew business was business. And just after his fifth anniversary at the store, or about a year after Dunnahoo walked through the doors of Star Dodge, Zinsser departed to a dealership down the street. He was back a year later.

“I should have just watered the grass where I was at instead of thinking it was greener on the other side,” he says.

Dunnahoo never held it against Zinsser. Having been through ownership changes in his career, he understood Zinsser’s need to take a look around. “My initial impression of Jeff was he was good people with good morals, and I think that Jeff’s beliefs didn’t really align with some of the leadership in this store before I got here,” Dunnahoo says. “And that’s one thing I told him going in, that I’d never ask him to do anything that puts him in jeopardy. It’s what I stress to all my employees.”

That conversation set the tone for how Zinsser manages his department. It consists of F&I managers Dan Hall, who has been with Star for 11 years, and Jeremy Johnson, who joined the team three years ago. They operate out of a central office inside the Star Dodge Chrysler Jeep Ram building, which is about a two- to three-minute walk from Dunnahoo’s Hyundai franchise.

When customers at the Hyundai location are ready to be turned over to F&I, salespeople will drive them over in a golf cart to one of Zinsser’s producers. Their first objective, Zinsser says, is to secure the deal and protect front-end gross. “We have things we have to accomplish as a department, but we’re here for the salesperson and the customer,” he says.

The F&I department was averaging about $1,100 in F&I profit per retail unit when Dunnahoo decided to equip the F&I offices with Reynolds and Reynolds’ docuPAD system about five years ago. He saw it as an opportunity to catch the digital wave and button up the process. “I just felt like it would make us 100% compliant, allowing us to present products the same way with every customer. And from listening to our customers, they love it.”

Star’s F&I department was averaging about $1,100 per copy when Mike Dunnahoo decided to equip the F&I offices with Reynolds and Reynolds’ docuPAD system. The group now averages $1,872 per copy on new vehicles and $1,542 on used. Service contract penetration went from 40% to its current rate of 62%. Acceptance rates are also up for GAP (61%), theft protection (76%), tire-and-wheel (21%), and a bundled appearance product (20%).
Star’s F&I department was averaging about $1,100 per copy when Mike Dunnahoo decided to equip the F&I offices with Reynolds and Reynolds’ docuPAD system. The group now averages $1,872 per copy on new vehicles and $1,542 on used. Service contract penetration went from 40% to its current rate of 62%. Acceptance rates are also up for GAP (61%), theft protection (76%), tire-and-wheel (21%), and a bundled appearance product (20%).

The group now averages $1,872 per copy on new vehicles and $1,542 on used. Service contract penetration went from 40% to its current rate of 62%. Acceptance rates are also up for GAP (61%), theft protection (76%), tire-and-wheel (21%) and a bundled appearance product (20%).

“I think it created more consistency with the customer, created better habits. I think it gave my guys more confidence. When a salesperson is out there with a customer, they can touch and feel the car.” That’s not the case in F&I, Zinsser says, but docuPAD closes the gap. “It’s just a great tool, not just for compliance, but being able to relate what you’re offering.”

Nothing Out of Place
Dunnahoo says there isn’t a product on the menu that buyers don’t need. “If I don’t see value in a product, even though it’s made me a lot of money, I don’t do it,” he says. “And I think that’s one of the reasons Jeff’s team runs these numbers, because they believe in the products, too.”

To ensure the finance team is clear on Dunnahoo’s expectations, the group keeps signed “ethics statements” on file for each producer. The dealer also requires that his F&I team complete Ally’s Equal Credit Opportunity Act training course. When the Consumer Financial Protection Bureau came on the scene in July 2011, the group acted quickly, putting caps on rate markups and product prices and adopting the Association of Finance & Insurance Professionals (AFIP)’s rate modification form.

Finally, Zinsser personally inspects every deal once it’s ready to be submitted to accounting to make sure nothing is missing before the customer leaves.

Then there’s the group’s F&I product provider, EFG Companies. Dunnahoo admits there was some familiarity with the company when he first took over Star, given that EFG was the product provider during his time with the Moritz and Patterson organizations. But he says that’s not the only reason he stuck with the company.

“I guess the reason that they’re the right partner for me and my organization is they understand my values, because it’s not about the money,” Dunnahoo says. “Sure, I want to make a dollar. But at the end of the day, we need to take care of the customer.”

And it’s been a give-and-take relationship ever since that partnership was forged. About the time regulators in the state of Washington were catching onto the practice of payment packing in the late ‘90s, early 2000s, it was Dunnahoo who urged the company to embrace F&I menu selling.

The dealer had another suggestion about a year and a half ago, recommending that EFG delve into service drive training. “I said, ‘We’re willing to be the guinea pig to help you develop the curriculum, and then you can roll it out to the rest of your dealers.’”

John Stephens, EFG Companies
John Stephens, EFG Companies

John Stephens, EFG Companies’ executive vice president of dealer services, says the company already had a 20-year company veteran on staff with a background in service when Dunnahoo made the suggestion. EFG then morphed its sales and F&I engagement model into a new service drive program for which Star has been the beta tester.

“I think we are just now approaching 12 months, and just now got to the stage where we feel like it’s marketable,” Stephens said. “By that I mean we were effective after three months, but we became even more effective after six months. Now we have a story to tell. Mike has certainly noticed its effectiveness that now he wants to share it with other dealers that he’s close to.

“And that speaks volumes. He didn’t come to us saying, ‘Hey, can you help us?’ He’s saying, ‘Hey, I think I can help you.’”

Unspoken Rules
Hollis Goode began working with Star about the time Dunnahoo invested in the docuPAD. As EFG’s regional vice president of dealer services, he coordinates Star’s monthly sales training, dealer audits, and any other resources or services the group needs. He has seen firsthand just how serious the dealer and his management team are about taking care of customers.

“We perform compliance audits for them. And it’s almost a worthless venture, because halfway through, we’re saying to ourselves, ‘Are we really doing this again?’” he says. “That’s because every sheet of paper is in the same place every single time. And that’s all Jeff.

Hollis Goode, EFG Companies
Hollis Goode, EFG Companies

“He’s done a good job of training his two guys to emulate what he does,” he adds. “Then there’s Tracy, who’s involved in every transaction. In fact, I don’t think there’s one bid that goes out on a trade that he doesn’t have knowledge of.”

Tracy arrived about 15 years ago after separating from a group near Fort Worth. Stephens says the general manager was introduced to Dunnahoo and they immediately connected. “Mike has a lot of faith in him,” he says. “And when you got that continuity between the dealer and GM, who have the same mindset about customers, the whole organization takes on the personality of the dealer.”

Dunnahoo does take pride in his hiring. He says it’s about reading a person’s character, watching their demeanor. He admits he’s missed on a few hires, but says he’s had a lot more successes than failures. But what impresses both Hollis and Stephens is the dealer’s willingness to rehire employees who leave.

“A lot of stores have a policy that says, ‘We don’t rehire.’ I think that’s kind of the unspoken rule in the car business,” Stephens says. “And I would say that a lot of people who decide to leave Mike to chase bigger money end up calling back and saying, “I might have made a mistake.’”

Hollis adds: “Mike says he never takes it personally, but I can tell you it does hurt him when people who have been there a long time leave. But he looks at it from the perspective of someone’s trying to take care of their family.”

Taking Care of His Own
Dunnahoo has faced adversity. There was the expansion period in 2001, when he added Honda, Hyundai and Toyota dealerships to his store count. Only the Hyundai dealership remains; the other two stores were sold in 2005.

But the group did survive the Great Recession. In fact, it thrived. Dunnahoo added the Chrysler and Jeep franchises and refused to downsize, insisting on stability within his sales and executive management teams. His operation responded by continuing to rack up accolades both in the industry and in the community.

In 2012, the group made Automotive News’ annual list of the “Top 100 Best Dealerships to Work For.” The group was also named a Chrysler Elite Dealer in 2011. Also in Star’s trophy case is the Daimler Chrysler Lone Star Top 50 Award for customer satisfaction. And since he took over 18 years ago, Star has maintained an “A+” rating with the Better Business Bureau.

Local honors have included the United Way of Abilene’s Community Excellence Award in 2005, 2006 and 2012, as well as the Abilene Cultural Affairs Council’s 2005 Outstanding Business Award, the United Way of Abilene’s 2007 Pinnacle Award, and the Boy Scouts of America’s Silver Beaver Award in 2008.

Dunnahoo has served on countless boards and committees, including the Abilene Education Foundation and the Abilene Chamber of Commerce, which honored him with its Business Person of the Year Award in 2013.

Located behind Mike Dunnahoo’s operation is the Alameda Addition, a small neighborhood built in the late ‘60s to house families serving at the nearby Dyess Air Force Base. Known locally as “The Four Way,” the area had become a hotbed of crime and drugs before Star joined forces with the community in the summer of 2010 to restore the once thriving neighborhood.
Located behind Mike Dunnahoo’s operation is the Alameda Addition, a small neighborhood built in the late ‘60s to house families serving at the nearby Dyess Air Force Base. Known locally as “The Four Way,” the area had become a hotbed of crime and drugs before Star joined forces with the community in the summer of 2010 to restore the once thriving neighborhood.

But Dunnahoo takes his greatest pride in Alameda Addition, a small, 2.24-mile patch of a neighborhood that sits just behind his operation. Built in the late ’60s to house families serving at Dyess Air Force Base, the once thriving neighborhood, known locally as “The Four Way,” had become a hotbed of crime and drugs.

“It was actually No. 1 in aggravated crime in Abilene, Texas,” says Kim Bosher, Dunnahoo’s former director of marketing and public relations. “That’s when a local nonprofit came to us wanting our support.”

Connecting Caring Communities (CCC) joined city leaders in 2009 to convene the Abilene Neighborhood Initiative. It was created to revitalize five low- to moderate-income neighborhoods that, collectively, accounted for 20% of the city’s crime. When Bosher suggested the dealership get involved, Dunnahoo was all in — just as long as his contributions were directed to the Alameda Addition.

He then took his involvement a step further, leveraging his connections to put together a team of private businesses to join CCC, a local church, the Abilene Police Department, and a few residents in launching the Neighborhood Summer Slam in 2010. It hosted about 200 local youths, and offered boxing and cheer class demonstrations, arts and crafts classes, and much more. They also launched a scholarship program to allow local youths to take part in sporting programs as well as a neighborhood association.

Dunnahoo wasn’t done. He teamed with the Dyess We Care Team, a group of active duty airmen that act as community volunteers. With the dealer providing the financing and the airmen providing the muscle, they began refurbishing homes in the Alameda Addition.

“We started educating the neighborhood that, if they came together, they could be empowered to make a change in their neighborhood.”

The crack houses began to disappear and the crime rate fell drastically. The effort’s crowning achievement was the opening of the Abilene Community Center in 2013, providing kids with a place to play and do homework. The neighborhood continues to raise money through grants and donations from the community to improve the center’s outside facilities, and Dunnahoo continues to fund four home renovation projects a year, the Dyess We Care Team providing the muscle.

And in June 2013, Abilene Police Chief Stan Standridge credited Star for its work in the Alameda Addition, with its efforts serving as a model for revitalizing the four other neighborhoods identified by the Abilene Neighborhood Initiative.

“So many wonderful things happened,” says Bosher. “As a result, the neighborhood started looking out for us. I would get calls saying, ‘Hey, I saw a car on your lot and this is the license plate,’ or ‘Hey, your security lights aren’t coming on at night.’ So we saw drop in crime on the lot, because we were losing thousands of dollars to vandalism before we got involved.”

Dealer Mike Dunnahoo walked through the doors of what was then Star Dodge on Aug. 6, 1999. The dealership, which is located 180 miles west of the Dallas-Fort Worth metro area along U.S. 83 in Abilene, Texas, was originally built in 1962. In March 2014, Dunnahoo renovated the facility, adding 6,500 square feet to the service department and showroom. The Hyundai franchise, which is about a two- to three-minute walk from the Star Dodge Chrysler Jeep Ram showroom, was added in 2001.
Dealer Mike Dunnahoo walked through the doors of what was then Star Dodge on Aug. 6, 1999. The dealership, which is located 180 miles west of the Dallas-Fort Worth metro area along U.S. 83 in Abilene, Texas, was originally built in 1962. In March 2014, Dunnahoo renovated the facility, adding 6,500 square feet to the service department and showroom. The Hyundai franchise, which is about a two- to three-minute walk from the Star Dodge Chrysler Jeep Ram showroom, was added in 2001.

Bosher left Star in May 2015 to become the events director for the Abilene Chamber of Commerce. The grind of car business hours had finally taken its toll after 19 years as Dunnahoo’s “right-hand gal,” as he calls her. “It was hard to leave, and I miss them very much. Mike Dunnahoo, he’s like a father to me, as he was to all of his people,” she says, saving her biggest compliment for Zinsser.

“I can’t say enough good things about Jeff and his family,” she adds. “He was loyal, so dependable. I mean, if I ever had a personal issue, I felt comfortable going to him. As far as leadership in that store, there was Mike and there was Jeff. He’s just a stellar individual.”

Bosher’s comments don’t surprise Dunnahoo. “I’ve been fortunate over the years to have had a lot of people that I’ve trained that have become dealers, general managers, you know, very successful,” he says. “I hate losing people, but at the same time, you have to grow those people.”

(Photos by Steve Butman Photography)

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