In its second year, the Innovative Aftermarket Systems (IAS)-sponsored F&Idol contest, once again, sought out the best F&I presentations in five product categories. This month, F&I and Showroom magazine reveals the best of the best, and offers a few highlights from their video entries.
In July, readers were asked to submit their best on-camera pitch in the following categories: GAP, Key Replacement, Vehicle Service Contracts, and Tire and Wheel. Added this year was a new category that allowed contestants to submit an entry for a product category of their choosing.
The videos had to be less than five minutes long, and show the F&I producers handling at least two objections. Entries were then reviewed by a panel of eight judges, including Bob Corbin of IAS, F&I and Showroom magazine’s Gregory Arroyo and “Mad” Marv Eleazer, celebrated F&I trainer Ron Reahard, Great Lakes Companies’ Steve Veldkamp, CNA National’s Alan Miller, compliance expert Robert Harkins, and United Development Systems’ Randall Crisorio.
Rising to the top were three F&I producers from Michigan, one from Maryland and one from New Jersey. They each received a cash prize of $1,000, as well as airfare and hotel accommodations to Paris Las Vegas, the site of the magazine’s Industry Summit 2012. One of them will be selected as the 2012 F&Idol winner, and will receive a check for $2,500. Here’s a look at this year’s finalists.
Store: Suburban Toyota, Troy, Mich.
Years in the Business: 19
Years at Current Dealership: 9
Claim to Fame: He’s Mr. Consistent at The Suburban Collection, averaging 1.9 products per deal at his Toyota store. His profit per vehicle retailed (PVR) sits around $1,000.
Keys to Success: The support he gets from F&I Director Gary Allgeier, and Great Lakes Companies, the group’s income development company. Borg also attributes his success to the video recording system the group installed in all F&I offices. Seeing himself in action allows him to spot opportunities for improvement, he says.
Customer Objection: I really want to stay within my budget.
Raymond: I understand. You’ve probably settled with your wife what the budget should be, and I respect that. I have one more suggestion I’d like to show you: So, you told me you understand what GAP is, you just don’t want to have a higher payment. There is a solution and it’s called a 63-month term. It only adds three more months to your payment. It not only keeps your payment down, but, from what I’m looking at, it actually drops your payment $5 and gives you the GAP.
So I’d like to recommend that. It’s $5 less, your wife is going to be happy because you’re coming home with a lesser payment, and guess what? That GAP coverage, you’re going to be very excited because you’ll be fully covered if something potentially catastrophic happens that causes a total loss. Would you like to go with that GAP coverage?
Next page: Key Replacement and Vehicle Service Contracts
Store: Metro Imports, Kalamazoo, Mich.
Years in the Business: 16
Years at Current Dealership: 3
Claim to Fame: He averages at least one product per deal and his PVR hovers around $1,000 despite being in a lease-heavy dealership. He also claims a 50 percent acceptance rate on key replacement.
Keys to Success: Getting certified by the Association of Finance and Insurance Professionals, and always keeping an open mind to new ideas and techniques.
Customer Objection: Keys can’t be that expensive. I think I’ll take my chances with it.
Joe: Sure, I certainly understand that. A few of my other customers have mentioned that. There’s one thing I’d like to show you. See this key? It’s very similar to the one you’re getting with your Camry. It is a smart key. You don’t have to put it in the ignition or anything; it just sits in the car. Well, this is about a $600 key.
It used to be that you could go down to the grocery store, spend $10 to $20 and get a new key. Well, that’s no longer the case. You have to order them from Toyota, which programs the key. So, this key is basically a computer chip, and it’s quite expensive.
So rather than you having to spend $500 to $600 on a new key to replace it, with this five-year program, you’re covered for up to $799 per year. So, basically, if you lose one in the first year, they’re going to pay for it to be replaced. If you lose it again during the second year, they’re going to pay for it to be replaced. So, it is a pretty nice program to take advantage of.
Vehicle Service Contracts
Store: Timbrook Automotive, Cumberland, Md.
Years in the Business: 8
Years at Current Dealership: 5.5
Keys to Success: The great training she’s received from Fred Nesta and Colvill Omanwa from Resource Automotive (The Warranty Group). Wilson also believes in the power of role-playing, and is always researching and reading industry publications to find new ideas and techniques. The quote she lives by is: “Amateurs practice to get it right. Professionals practice so they don’t get it wrong.”
Claim to Fame: She averages two products per deal and claims a 55 percent acceptance rate on service contracts.
Customer Objection: I just don’t think I’ll ever need it.
Dina: I understand. Why would you want to pay for something you don’t need, right? Do you mind if I share something with you? Do you have car insurance on your vehicle? I hope so. That’s called physical damage insurance. What is your annual premium? OK, $1,000. Do you have a deductible? $500. Let’s say you go out and have a little fender bender that costs about $513. Would you turn that in? No, you wouldn’t. Would you turn in a larger one, maybe $2,500? Absolutely. If you turn in that one and a couple of smaller ones, do you think your insurance company could raise your rates? I’m sure they could and will. And do you think they could cancel it?
Let’s look at the mechanical repair agreement. The price on it is $2,500 to protect you for five years. Did I tell you there was a deductible? Right, there isn’t one if you bring it to Timbrook. Now, if you have a small claim, would you turn that in? Probably. What about a larger claim? Absolutely. Can I raise your premiums? No, I cannot. Can I cancel you? You can cancel me, but I can’t cancel you.
So let’s take a look at these. Over the next five years, you’re going to be paying $5,000 for your car insurance. For the mechanical repair agreement, you’re going to be paying $500 a year. So if you’re willing to spend $5,000 to protect the outside of the vehicle, doesn’t it make sense to spend an additional $500 a year to protect the inside, too, as well as protect you from the future high cost of repairs? So which would you prefer: Option A or B?
Next page: Tire and Wheel and Other (Prepaid Maintenance)
Tire and Wheel
Store: Freehold Buick GMC, Freehold, N.J.
Years in the Business: 31
Years at Current Dealership: 10
Claim to Fame: He averages a product per deal and claims a 60 percent acceptance rate on tire-and-wheel protection.
Keys to Success: Being the anti-F&I business manager. You won’t find Bell in a suit and tie, but rather a Tommy Bahama shirt or some other casual attire. Customers are also greeted by a rescued greyhound, which Bell has in his office as an icebreaker. Bell also makes sure his computer screen is facing his customers so they always know what he’s doing.
Customer objection: My insurance covers it.
Chris: Absolutely, that’s a collision loss. What’s your collision deductible? ($500). OK. What usually happens when you make a claim? Insurance goes up. Well, the nice thing [about our protection] is it’s transferable and it’s cancellable. If you remember all the snow we got the last two winters, well, we’d have four to five people a week in the service department with either destroyed rims or blown-out tires. And if you look up on the wall (points to framed newspaper clippings hanging on the wall), the roads made front-page headlines because of how bad they are here in New Jersey.
If you have an interest in it, it’s $699, it is five years, it is transferable, it’s cancellable and there is no deductible. The nice thing is it has nothing to do with your insurance company. You can absolutely pay cash for this, but you do have low-rate financing. If you wanted to put it in the payment, it would be $18 per month, or your payment stays the same if you just pay cash for it.
Other (Prepaid Maintenance)
Store: Suburban Ford of Sterling Heights, Mich.
Years in the Business: 10
Years at Current Dealership: 2
Keys to Success: Studying up on Ford’s parts pricing, and regularly visiting with the service department to understand maintenance and repair costs. He also is a fan of Grant Cardone and listens to the sales trainer’s closing tapes three to four times a week. He also attributes his success to the support he gets from The Suburban Collection.
Claim to Fame: He averages 1.7 products per deal and claims a 30 percent acceptance rate on prepaid maintenance.
Jeremy: The great thing about the maintenance program is you get to schedule your maintenance today and take care of it at today’s costs and today’s labor rates. The cost is only $845 to cover your maintenance for the next five years, 60,000 miles. John, do you think that’d be a great program for you to sign up for today?
Customer Objection: The price seems high.
Jeremy: Let me show you how this could be the best investment you’ve made on your current vehicle purchase today. These are the set rates through Ford, which are the same for all Ford dealers. This is the quantity of eight oil changes (points to sheet). Each one is going to cost you between $45 and $50. Now, we have it set at $45 here at Suburban Ford, so that’s going to equal about $360. Every 15,000-mile inspection you get on your vehicle is going to cost you between $80 and $100 per inspection. One brake replacement on your vehicle could cost you about $300, belts and hoses — just one — could cost you $135, wiper blades — about $60 for that whole period of time. Average cost you’re going to be spending on your vehicle is about $1,200. John, $845 today and you’re going to be paying it untaxed right now. That’s close to a $400 savings there, sir. I’d like to save you that money and get you signed up for this program today.