At Hoy Fox Toyota in El Paso, Texas, the finance department is on a roll. The team, led by Finance Director Victor Martin Del Campo, closed out 2011 with a 63 percent year-over-year improvement in F&I profit and a 43 percent jump in average profit per retail unit (PRU). And they ended the year with a bang, generating $160,000 more in December 2011 than the same month a year prior — with five fewer deals.
A combination of detailed training, strong support from executive management and mutual appreciation between the departments is what keeps the finance team’s gears grinding at full speed. The fact that they’re all good friends also helps, keeping communication lines open and doors wide open for feedback and questions.
“We’re so close as a team that we all know the same things,” Martin Del Campo says. “If they don’t train with me, they train with Larry Salcedo or they train by themselves.”
Salcedo is the team’s longest tenured finance manager. His average PRU increased from $1,000 at the start of 2011 to $1,700 by the end of the year. His teammates, Osvaldo “Ozzy” Herrera and Matthew McCoey, also realized big increases last year, tracking at just less than $1,600 per copy by year-end.
Trust in the Training
General Manager David Amaya and General Sales Manager Luis Silva also played a critical role in the F&I team’s success last year. They’re responsible for keeping employees trained and up to date on company policies. In late 2010, they sent Martin Del Campo’s team to Houston for GSFSGroup’s F&I training in late 2010. That set the stage for success in 2011, a year in which the team’s averages increased steadily each month.
The big gains set off some alarms with management, who may have worried that the numbers were too good to be true. Martin Del Campo says that owners Steve Fox and Steve Hoy are highly protective of the store’s “A+” rating with the Better Business Bureau. “We [improved] so fast that our dealer principal has actually audited our deals to make sure we’re doing everything right,” he says.
The Toyota store, which averages 250 deals per month, is just one of eight brands represented in Hoy Fox’s three locations. Silva is quick to note that the Toyota store’s F&I numbers weren’t always so great. He says the training, along with a few tweaks to the store’s procedures, is what turned things around.
“Years back, I think the problem was that the foundation wasn’t there. Once we laid that foundation, the numbers started going up,” says Silva, adding that he and Amaya are in constant communication to keep their two departments in sync.[PAGEBREAK]
Nuts and Bolts
The F&I process Martin Del Campo’s team employs takes about 30-45 minutes, with each manager aiming for a minimum of three products per deal. Salcedo, a 16-year auto industry veteran, says he aims for four.
Silva believes the key to the team’s success is that they call menu items “benefits” rather than “products,” which he says makes a big difference with customers. “I’ve spoken with a lot of dealers and finance directors, and they always refer to them as ‘products.’ But it’s not a product,” Silva says. “When you can convince the customer that it’s a ‘benefit,’ the success will follow.”
Martin Del Campo, who has been with the dealer group for six years, operates as more of a coach for his F&I producers than a manager. But his dance card is full. In addition to managing the Toyota store’s F&I team, he also serves as the finance director for the group’s Lexus store and satellite used-vehicle lot, Can Do Auto Solutions.
To save time, Martin Del Campo inspects each deal for errors or missing information through a process called “Signature,” which was installed by Gulf States Toyota Distributors, the store’s primary inventory source. After determining the right lender for each deal, the deal jacket gets handed off to the finance manager.
Martin Del Campo also submits about 90 percent of deals to lenders, duties that go against the grain for an F&I director. But he says he does it to free up his producers so customers aren’t waiting. And if things are flowing, Martin Del Campo will even match customers up with his F&I managers based on how well he thinks their personalities will mesh. “I don’t know if it’s right or not, but, based on the numbers, it’s working,” he says.
As for the store’s lender mix, 80 percent of the store’s finance deals are sent to Toyota Financial Services, with the remainder going to Wells Fargo or the Greater El Paso Credit Union. And when presenting product to customers, the F&I team uses GSFS’ four-column menu, and a solution provided by the StoneEagle Group allows data to be shared between the menu and the dealership’s Reynolds and Reynolds DMS. Martin Del Campo also uses StoneEagle’s performance reporting solution to keep track of his team.
GAP and VIN Etch are the store’s top sellers behind extended service agreements, and, collectively, the F&I team averages $1,300 per copy. Salcedo says the group isn’t big on objection-handling techniques, preferring instead to arm themselves with evidence manuals when dealing with wavering customers. “I personally drive two Toyotas and I have one with an extended service contract and a certified warranty and one without a warranty,” he says, adding that he makes sure to show on-the-fence customers his repair receipts. “Initially, I didn’t think I would have problems on a Toyota, but I show customers that I had to pay a substantial amount of money for something minimal.”[PAGEBREAK]
Like most dealerships today, Hoy Fox Toyota serves an increasingly knowledgeable customer base. Not only do they know a lot about the vehicles they want before they call, e-mail or walk into the store, they’re very rate-conscious and payment oriented, says Martin Del Campo. The typical customer claims a credit score of between 655 and 675 and yearly income of about $36,000.
“They’ve done the research before they come in and buy a Toyota,” Martin Del Campo says. “It’s very different than a customer who buys a Chevy or a Ford, and I’ve worked at both stores before. They sometimes know the product a lot better than we do.”
But Martin Del Campo still has the edge on the finance side, and he works hard to nail down the best rate possible for each customer. He and his team take pride in their average rate spread of 0.5 percent, a figure few buyers could beat on their own. “We’d rather give the customer the best rate at the time than lose them on a charge-back because they’re going to refinance somewhere else,” he says.
All three managers work the same hours, which allows them to take their time and explain benefits without keeping customers waiting. Meeting and break times never interfere with business, as the finance team has a quick conference every morning over Dunkin’ Donuts, and eats lunch together inside the dealership every day without fail. It’s not mandatory, but the team’s been doing it so long that they’ve gotten used to it. “We eat very fast,” Martin Del Campo laughs. “If there’s a deal, it’s right back to business.”
From the Top Down
Every member of Martin Del Campo’s team has spent time in sales, and Silva believes that’s why the connection between the two departments is so strong. “They know how hard it is to sell a car, and I think that helps them present benefits [in the F&I office],” Silva says. “And the sales team puts all of their trust in the F&I managers and I think that has been a key as well.”
Sitting on everyone’s desk is a list of the store’s business principles, which were created and handed out by Fox. His office is in the Toyota store, and Silva says his open-door policy has set the tone for the dealership. And with turnover costing dealerships thousands of dollars each year, he says it’s that type of leadership that keeps his team together.
“Depending on what kind of dealer principal you have, that’s how the store is going to operate and run,” Martin Del Campo says. “If you have a dealer principal that believes in taking advantage of customers, the entire dealership is going to run the same way.”
At the end of the day, Salcedo says, that team-effort approach is the source of Hoy Fox Toyota’s present and future success. That, and their drive to be No. 1. “If we’re at $1,700,” he says, “we want to be at $1,701 next month.”