Car Pros Chrysler Jeep Kia is hardly your typical car dealership. The operation is spread out across three lots, with rows of brand-new Chryslers and Jeeps at the center and a stand-alone Kia operation down the road. Right now, finance director Scott Petersen’s focus is on the lot across the street, where forty or fifty certified pre-owned (CPO) units wait for the right buyer.
“We’re just getting started,” Petersen says. “We’re going to try to move sixty to seventy units a month. Chrysler is kicking in some money to push CPO.” Even before the marketing campaign was fully underway, the new lot proved to be an instant success. “Ten units in the first ten days,” Petersen says, smiling. “Not bad.”
There’s no shortage of used Jeep Cherokees and Dodge Chargers on the CPO lot, but many other makes and models help to fill out the inventory. There’s even a BMW 7 Series right out front. All the cars and trucks are buffed, polished and ready to go.
“To be certified, they have to pass a 125-point check,” Petersen says. “The customer gets a signed copy of the inspection report and a Carfax report. We also offer an eight-year, 80,000-mile limited warranty. Not every buyer who comes in looking for a new car can qualify. That’s a CPO customer. We’ll tell them, ‘Let the first owner pay the depreciation. With this warranty, you’re getting a better deal than you would on any new car.’”
The road to Car Pros
Petersen, an Illinois native, took a long, winding path to his current position. “You could say I’ve been in sales since I was 16,” he says. “I moved out from Illinois in ’86, and I didn’t have much. I slept in my car for a while. But I had good jobs managing drug stores for a few years, before I got into car sales.”
In 1990, Petersen went to work for a vehicle wholesaler. “It was great,” he says. “For the first time, I worked Monday to Friday and had the weekends off.” Wholesale led to Petersen’s introduction to the world of retail sales. “At one point, I was selling thirty cars a month to one dealership: South Bay Toyota in Gardena. Eventually, they hired me as a salesman, and I made about $19,000 in my first month. I said, ‘Hey, this might work out!’”
After a few years at South Bay Toyota, Petersen had the opportunity — and the capital — to start his own mortgage brokerage. After early success in a booming real estate market, Petersen’s new venture was derailed. The first attack came from within, when Petersen discovered that one of his employees was embezzling his profits. The brokerage then fell victim to an outside corporate takeover.
“It turned out to be a one-year stint,” Petersen says. “I knew I would be going back into automotive. But, by then, I knew finance from the inside out. And I knew how to work with banks.”
Petersen believes his experience in sales and finance prepared him well for his work as a finance director. “Customers don’t always know what good credit is,” he says. “There’s a science to it. You have to work a special finance deal backward. Our mailers target potential customers who have a credit score between 500 and 600. They call in and we prepare them for the visit. We tell them which stips they need to bring with them.”
In a slow market, Petersen believes that Car Pros’ push toward more CPO sales makes sense, both for the customers and the lenders. “Right now, the banks are only buying deals that make sense. If I’ve got a first-time buyer who wants a $25,000 car, I already know what stips each bank will want. We work with Bank of America, Wachovia, Chase … Wells Fargo has the best advances.”
To streamline their sales process and sell more F&I products, Car Pros partnered with Deerfield Beach, Fla.-based JM&A Group. Petersen believes that JM&A’s training, auditing and menu-selling programs have been an invaluable asset.
“I send all my guys up to Washington for their training course,” Petersen says. “For five days, eight hours a day, they’re learning the process and committing it to memory. They’re being filmed the whole time. Once you learn it that way, and can repeat it verbatim, you’re ready.”
Every week, Petersen’s JM&A contact, Matthew Lopez, stops by for an audit. He has been impressed with the team’s performance. “Car Pros is a store with strong ownership and management,” Lopez says. “Scott Petersen is an asset to their team. His relationships with banks and his strong closing abilities allow his four business managers to focus on customer satisfaction and selling valuable products, and not worry about what bank is going to buy their deal. The store continuously runs over 55 percent service contract penetration. That includes their Kia store, which is a feat in and of itself, due to the extended warranty Kia provides to their customers.”
The road ahead
According to Petersen, selling CPO, as well as F&I products, is simply a matter of following the proper procedure. “You’ll get a chance to sell products, but only for a few minutes,” he says. “The customer is always afraid their monthly payment is going to go up, so the first thing I’ll say is, ‘I see your payment is $400 a month.’ You make it clear that the warranty is free, and all you want to sell them now is a service plan. It’s basic maintenance. It’s interior and exterior protection in the form of Xzilon, which is right there on the JM&A menu. It works.”
Petersen is confident that, with the backing of Car Pros, JM&A and Chrysler itself, all the parts are in place to make the new CPO lot run smoothly.
“We’ve got the training,” he says. “When you sell a car, it’s the dealership that stands behind the contract. But we have trust in JM&A and they have a vested interest in us. We’re making sure customer service happens.”