Setting the Pace for 2008

In its January issue, the magazine recognized the 2008 F&I Pacesetter of the Year. And while all touted profitable F&I departments, it was their commitment to improving the image of the automotive finance industry that made them stand out from the rest. Here’s a look at F&I Management and Technology magazine’s six F&I Pacesetter of the Year:

ABC Nissan
JAY CARLEY, JR., PHOENIX, ARIZONA
NOMINATED BY DEALERTRACK

At ABC Nissan, Executive Manager Jay Carley, Jr. makes sure that the customer comes first, especially when it comes to his F&I operation. It’s one of the reasons why the Phoenix, Ariz.-based dealership is one of the top 100 Nissan dealerships when it comes to customer satisfaction.

“This is something we are extremely proud of,” said Carley, whose dealership was chosen as a 2007 Pacesetter. “For our volume that’s phenomenal.”

Despite the focus placed on customer satisfaction, the dealership still maintains a 71-percent acceptance rate for vehicle service contracts. One move Carley made was with respect to pay plans, which reward F&I managers for customer satisfaction rather than penetration rates.

“We pay less on aftermarket products and more on warranties,” Carley explained. “This is better for the customers, because they get more use out of warranties. I’d rather a customer have a warranty than a paint sealant.”

Carley views e-contracting as another way to improve the customer experience, which his dealership began adopting in the summer of 2006. The dealership’s motto ever since is: “eContracting — it’s a way of life.” Currently, about 70 percent of the dealership’s new-car business is handled through e-contracting. Carley said it comes down to dedication.

Carley’s dedication to customer satisfaction is matched only by his commitment to community service. His dealership’s involvement includes fundraisers for the Child Crisis Center, and an adopt-a-family program he does every Christmas season.

Peoria Kia
MICHAEL CRAWFORD, PEORIA, ARIZONA
NOMINATED BY AUTOMOTIVE DEALERSHIP INSTITUTE

At Peoria Kia, the company motto is simple: “Treat every customer like it’s the last customer of the day, no matter what their FICO score is.”

With more consumers slipping into higher-risk credit categories, finding ways to get subprime contracts bought is a top priority for the Peoria, Ariz.-based dealership. Michael Crawford, general manager and 20-percent owner of the dealership, said the key is training employees to understand a customer’s situation, as well as his or her needs.

Despite catering to more credit-challenged customers, the dealership’s F&I office still maintains a 69-percent acceptance rate when it comes to vehicle service contracts. Crawford said the key is training his finance people about how to explain the limitations of a manufacturer’s warranty.

“I have the best people pushing it,” Crawford bragged.

Understanding the market and properly training employees are what made Peoria Kia the No. 1 Kia dealer in Arizona. The accolade is even more deserving with the dealership having only a third of the property an average Kia store has (2.9 acres). The store also wrestles with location, as it’s not located on a major thoroughfare.

Consumer confidence is the only concern the dealership has these days, especially with all the talk of the subprime mortgage fallout. To counter, the dealership lowered interest rates on auto loans, a move that increased revenue by $650,000 in 2007.

“The economy is not good or bad,” Crawford said. “The economy is good or bad right between your ears.”

Despite the dealership’s success, Crawford has not forgotten what made it possible. Currently, his dealership sponsors the Special Olympics, as well as events organized by the Peoria police department. Kia Peoria also raised $25,000 this past Christmas to buy presents for needy children.

Crawford added: “You can’t make a lot of money off of the community without giving back to it.”

Bob Moore Auto Group
MARK MOORE, OKLAHOMA CITY, OKLAHOMA
NOMINATED BY EFG COMPANIES

When asked what his dealership’s values are, Mark Moore will use words like respect, honesty, integrity and trust. His word use is one of the reasons why his Oklahoma City-based Bob Moore Auto Group invests in having each F&I employee certified through the Association of Finance and Insurance Professionals.

For Moore, success is measured by how well one navigates through today’s regulatory environment. This is why he demands consistency from his F&I operations, which he accomplishes through the use of F&I menus and regular audits.

Despite the close attention he pays to compliance, his F&I department has maintained a 50-percent acceptance rate for vehicle service contracts. And despite the challenges the industry faced in 2007 with respect to new-vehicle sales, Moore said his auto group is still seeing growth.

“This will be the best net income year for our F&I departments. We have increased our gross and net profit per unit by 5 percent and 12 percent, respectively, over 2006,” said Moore. “Our partnership with EFG Companies has been a key to our success. We’ve given them full access to manage our F&I departments for all of our stores.”

This success can also be attributed to obtaining and retaining the right employees in the dealerships. “All new F&I employees are sent to EFG’s training within 30 days of their start date,” explained Moore. “We have seen measurable improvement in our F&I departments as a result of this.”

The dealer group believes that a major part of maintaining good employees is getting them involved in giving back to the community. The dealership participates in blood drives, and each employee is given paid time off to volunteer at the Oklahoma Children’s Hospital. Most recently, the dealer group was recognized for its efforts in a food drive for the Regional Food Bank of Oklahoma. The drive raised 9,473 lbs. of food, enough for about 7,400 meals.

“We want to promote a spirit of giving to our employees,” Moore explained, “not just writing a check.”

Thielen Motor Inc.
GREG PAUL (GP) ANDERSON, PARK RAPIDS, MINN.
NOMINATED BY DEALERSHIP EMPLOYEE

Greg Paul Anderson has a simple strategy when it comes to financing his customers’ vehicles. The one-man team at Thielen Motors Inc. said the key is counseling rather than selling.

Located in Park Rapids, Minn., a two-car-dealership town with a population of about 2,500 people, Thielen Motors sells an average of 102 Chevrolets, Cadillacs, Pontiacs and Buicks per month.

“We’ve had record revenues the past few years” said Anderson, who was appointed by Ted Thielen, the dealership’s owner, to head up the finance department nearly eight years ago. “To improve revenue, we’ve had to go to more of a niche marketing strategy.”

That niche is today’s credit-challenged consumers. And despite the cliental, Anderson said he’s able to maintain a 68-percent acceptance rate for service contracts, which he attributes to aggressive Internet and direct mail marketing strategies.

As for compliance, the dealership requires that all front-end employees are AFIP-certified. Each is also mandated to attend ongoing GMAC training in Detroit, Mich.

Anderson says Thielen Motors is also a “direct resolution conflict location,” which means he has the ability and expertise to help customers resolve credit issues to improve their scores. It is this expertise that he takes to the community.

Aside from his work at the dealership, Anderson volunteers to provide credit counseling and education to local high schools, Indian reservations, women’s groups and even some out-of-state organizations. He says most people don’t read the fine print on credit card contracts, so he provides people with tips on how to improve their credit standing.

In addition to teaching, the dealership also donates money to several local youth and high school sports teams.

Pro Chrysler Jeep
JOHN SCHENDEN, THORNTON, COLORADO
Nominated by CNA National Warranty Corporation

It’s clear to John Schenden that running Denver’s oldest Chrysler Jeep dealership for the last 16 years was accomplished by following a simple motto: “We want to give every customer a perfect experience every time.”

Located in Thornton, Colo., just north of Denver, Pro Chrysler Jeep remains a process-driven dealership. “Managers are involved from the time the customer comes in,” Schenden said. “We don’t want there to be any mystery people, so managers and F&I personnel introduce themselves to the customer.”

Schenden also puts himself in front of customers, with his office separated from the showroom by a glass window. “With the lack of industry sales in 2007, everybody has been dedicated to working with each customer a little harder than has been done in the past,” he said.

Despite a decrease in floor traffic, Schenden expects the attention his personnel gives to customers to result in an 18- to 20-percent increase in revenue from 2006.

Chrysler Jeep’s 50-percent service contract penetration rate can also be attributed to the dealership’s customer-oriented goals, according to Schenden. And with a 97-percent sales satisfaction rating, Pro Chrysler Jeep seems to be taking good care of its customers. The next step for Schenden and his dealership is e-contracting, which should be up and running sometime this year.

Another key component of the dealership is community involvement, which includes participation in Outreach for Children and Ride & Drive for Colorado Schools. It’s also active in local, state and national dealer associations.

One project that stands out to Schenden is the company’s contributions to the Samaritan House, a 30-year-old non-profit agency that provides aid to needy families.

“The business is pretty simple,” added Schenden. “It’s all about the people, both customers and employees. If you treat each person the same, you’re going to get your fair share of the market.”

Monument Chevrolet
CARROLL SMITH, PASADENA, TEXAS
Nominated by American Financial & Automotive Services Inc.

Carroll Smith, president of Monument Chevrolet in Pasadena, Texas, takes a hands-on approach when it comes to his F&I department. “I think what mostly differentiates us in F&I is active involvement in day-to-day operations,” he said.

Part of that hands-on approach is requiring that all employees participate in periodic training. It also refers to set parameters Smith employs for each department. For F&I, Smith tells the department which lenders to use and what F&I providers to use. He also sets caps on rates and loan terms.

“Active management is the most important thing,” Smith emphasized. “Many times dealers will hire an F&I manager and say, ‘Do a good job.’ But they don’t keep an eye on them or follow up. We have a code of ethics that we expect the F&I department to adhere to.”

This strict code of ethics Smith refers to, however, hasn’t hampered his F&I department’s acceptance rate on vehicle service contracts, which stands at 58 percent. Smith said it really comes down to believing in one’s products.

“We start out with the basic belief that the product we’re selling is a real value to the customer,” he explained. “It’s a lot easier to sell something you believe in.”

To ensure that his dealership remains compliant, the dealership videotapes all transactions. This policy works two-fold, however, as Smith uses the videotapes to review his F&I managers’ performances.

Smith’s dedication to his community and his industry is as strong as it is to his own dealership. Currently, he serves as the National Automobile Dealers Association’s Region II vice chairman. He also finds time to volunteer for community organizations, such as with the Salvation Army and the local Boy Scouts.