Author Archives | Jessica Carrick

Time for VSCAC

Time for VSCAC

September is approaching fast, and that means it’s almost time for the annual Vehicle Service Contract Administrators Conference (VSCAC). Now entering its ninth year, VSCAC will take place at the Paris Las Vegas hotel and casino Sept. 10-12. The conference will be held alongside the F&I Conference, Subprime Conference and CRM Conference, all part of the annual Industry Summit.

The festivities begin Monday evening with an opening keynote address from Lewis Kuhl of Pathman Lewis LLP. Kuhl will present an update on new regulations and where the industry stands. Following the evening keynote, a welcome reception will be held in the exhibit hall. This is a great opportunity for attendees to walk the floor, see what the exhibiting companies are offering and network with others in the industry.

James Ganther of Mosaic Compliance Services will kick off the first full day on Tuesday morning with his keynote address: “Canceling Effect: Responding to a Dealership Closure.” From there, the day will be filled with panel sessions and workshops.

Tariq Kamal of AE and P&A magazines will serve as moderator for a panel of five individuals who will take up the debate between software as a service (SaaS) and in-house product administration. This panel is scheduled for Tuesday at 11 a.m., and will include Brent Allen of the StoneEagle Group; Provider Exchange Network’s Ron Greer; Matt Nowicki of Innovative Aftermarket Solutions (IAS); Kelly Price of National Automotive Experts; and F&I Administration Solutions LLC’s David Trinder.

Wednesday the agenda ends with a bang: F&I and Showroom’s Gregory Arroyo will lead a panel that will tackle the debate over the mobile menu and its effect on the F&I presentation. Arroyo will be joined by MaximTrak Technologies’ Jim Maxim; Shawn McCool of iTapMenu; Matt Nowicki of IAS; OptionSoft Technologies Inc.’s Nick Sennett; Mark Thorpe of The Impact Group; and the American Financial & Automotive Services Inc.’s Tom Wilson.

Click here for the full agenda and be sure to get registered before time runs out. The staff at F&I and Showroom and P&A magazines have put together a stellar lineup of keynote addresses and workshops directed to your interests.

Plus, it’s Vegas. Need I say more?

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Parts Providers Speak Out

Parts Providers Speak Out

When it comes to the parts market, there is no shortage of ideas about how it should be run, but there are some common threads that run through the whole industry. The companies that supply parts to vehicle service contract providers and administrators have built their reputations on delivering the right part in good working order,quickly, and that’s something that doesn’t change no matter who you talk to.

However, the technology that drives that process is constantly changing, and parts providers are adapting. This month, P&A asked several of those providers to offer some insights on the segment and where they think it’s going.

All-Import Auto Inc. is a family-owned business in Texas that has been around since the late 1980s. It has built it’s reputation on providing parts for higher-end vehicles, a niche it has found very profitable. Big “D” Auto Parts is also family-owned and operated, and has been since it was founded in the 1960s. It has chosen to specialize in the VSC market, with an emphasis on being a one-stop shop for all it’s customers’ needs. C&K Auto Parts also serves the VSC market, but it puts a strong emphasis on service. And VRG Automotive LLC is actually a group of recyclers across the country who share a call center, which allows them to route everything to a central location, then ship parts out from the closest facility.

While each company has a slightly different perspective on the industry, there is one common theme that runs through them – technology. The Internet and all of the automated and online processes it brought with it have radically changed the way the parts industry works on every level. And those changes are still happening. All four companies stressed that technology allows them to fulfill orders faster and more accurately, which equates to happier customers.

And the Internet has changed the business in other ways as well – it makes parts available from anywhere in the world, and makes it easy for potential customers to compare prices across a wide range of options. Some parts companies are taking advantage of that shift, looking to become the first place a customer looks, no matter where they’re located in the world; others have chosen to emphasize what else they bring to the relationship beyond price, building relationships based on service and speed. But whichever way they go, all the companies we interviewed are finding success in this new world of parts ordering and management.

To read how each company views the industry and what’s to come, click on their profile below.

Parts Provider Roundup

All-Import Auto Inc.

All-Import Auto Inc.
Keith Sturgeon, owner

Tell us about your company and the products you offer.

All Import Auto Inc. is a seller of used auto parts based in Fort Worth, Texas. We buy and dismantle vehicles and sell parts to auto repair shops and retail customers.

Auto salvage is a family business and I grew up helping out my father, Ron Sturgeon, in his auto salvage company before I started my own as a junior in high school in 1989. I have always been more comfortable working on foreign cars, so I gradually came to specialize in parts for imports.

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Big D Auto Parts

Big “D” Auto Parts
Hugh Pettigrew Jr., owner

Tell us about your company and the products that you offer.

Big “D” Auto Parts was established in Dallas, Texas, in 1963 and has been continuously owned and operated by the same family. We were a full-service auto recycler. Then, in the 1980s, an extended warranty company contacted us looking for a reliable source of alternative parts. Supplying parts to VSC companies is now our largest market. We specialize in used (like, kind and quality) and remanufactured major drive-line components. We also offer most smaller parts.

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C&K Auto Parts

C&K Auto Parts
Mitch Rand, president

Tell us about your company and the products that you offer.

C&K Auto Parts has focused on serving the VSC industry for more than 18 years. Over the years, our product offerings have grown to include a full line of both remanufactured and used powertrain assemblies, the most comprehensive selection of OEM parts (over 21 million unique part numbers) in the industry, as well as a line of aftermarket remanufactured small parts (electronics, brake components, steering components, axles, etc.).

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VRG Automotive

VRG Automotive LLC
Don Partin, president/CEO

Tell us about your company and the products that you offer.

The executive group of Vehicle Recycling Group (VRG) Automotive LLC consists of four owners of some the finest recycling facilities in the country: Nordstrom’s Automotive in Garretson, S.D., G&R Auto Parts in Oklahoma City, Okla., Spalding Auto Parts in Spokane, Wash., and Stricker Auto Parts in Batavia, Ohio. Collectively, they employ over 400 employees and they represent over 200 years in business under the same family names.

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Finding Value in Private Labeling

Finding Value in Private Labeling

Hamlet famously asked, “To be or not to be? That is the question.” Dealerships and F&I agencies face a similar, if less weighty, question: “To private label? Or sell someone else’s brand? That is the question.”

The concept of private labeling is pretty simple. An F&I provider creates and markets products under its own name, or “label.” So the Acme F&I Co. may sell Acme Service Contracts to consumers through dealerships. All of the brand equity – good or bad – belongs to Acme.

Under a private label arrangement, someone other than the provider labels the product and sells it under its own brand. This could be either the F&I agency or the dealership itself (in either case, the “intermediary”; for purposes of this article, we’ll assume the intermediary is a dealership). And so Danny’s Dodge Superstore could sell the Acme Service Contract as “The Danny Protection Program.” The brand equity resides with Danny’s Dodge.

An alternative to creating a private label is to create a captive provider from the ground up. This involves obtaining an underwriter and establishing an infrastructure for administration, claims adjudication, and payment – no small feat. Well-known examples of this include the Larry H. Miller Group’s LandCar Insurance Services and Van Tuyl’s Mechanical Protection Plan. But to pull that off requires a large enough volume to justify the expense. Private-label programs avoid that expense.

Why private-label? First, a little background. The lines are blurring about what constitutes a provider. Is it a company that just offers good products? Perhaps 20 years ago this was the case, but today many providers have become by necessity much more than suppliers of F&I products.

To survive, today’s F&I providers need a well-crafted suite of products, services, technology and training. Dealers demand, in exchange for the privilege of offering a particular provider’s wares, a host of profit, compliance, training and technological accoutrements.

In addition, the dealer’s loyalty to a provider is typically proportional to the level of commitment a provider is willing to invest in his success. The days of dropping off certs at the dealership and hoping the production fairy delivers bags of money are long gone.

Private Label Products

Offering private-label products can be a great way for product providers to offer a wider array of services without the added burdens and costs of development, ongoing administration, state regulatory compliance and underwriting. Expanding the portfolio of products and services a provider offers can lead to greater profits and enhanced customer loyalty while fortifying the provider/dealership relationship.

Safe-Guard Products International LLC is a provider of F&I products in the automotive aftermarket industry. Kitty Haas, senior vice president of marketing, spoke with P&A about the advantages to private labeling.

“By offering a complete portfolio of products, integrated systems, customer service-focused administration and options with underwriting and re-insurance, I believe that Safe-Guard is well positioned to help any partner build its brand through private label programs,” Haas says. “Flexibility and the capacity to deliver quick customization are key elements of any great private label partnership.”

By definition, companies that private label their products operate behind the scenes while the dealership attaches its branding, logo and name. Let’s examine the scalability of adding one private-labeled product to a dealership’s portfolio compared with an organic product offering. If another company will take on the responsibility for development, compliance, full-service administration and underwriting at a price point at or near what it would be for an organically “grown” product, the choice is clear – a private label is the way to go. The time to market will be drastically reduced, the dealership’s investment shifts from development to marketing and profits reach the bottom line in a shorter time frame.

Bob Furman, former president of MS Diversified (now Assurant), offers one good reason for private labeling a service contract program, “When a service contract carries a national brand, the consumer correctly assumes that it may be used almost anywhere. But when a service contract bears the dealership’s own brand, I think the consumer is more likely to return to that dealership for service. And that’s a big plus.”

Innovative Aftermarket Services (IAS), a provider of F&I aftermarket products, currently partners with 35 private label clients including VSC administrators, other ancillary product providers, agents and dealerships to offer private-label products. Bob Corbin, president of IAS, recently discussed with P&A the benefits of private labeling for his clients.

“IAS is perhaps best known for our product innovation and flexibility for bringing products to market and that is what makes partnering with us on a private label so attractive, in addition to cost,” Corbin says. “Since we take on the responsibility of full-service administration and underwriting for our partners, they can launch a product quickly. Over time, private-label partner companies also have the option to take over part of the administration. Some companies only use us for underwriting, claims adjudication and payment.”

For the traditional service contract provider, what type of products are good prospects for private labeling? Corbin says products like tire and wheel, key replacement, paintless dent repair, appearance protection programs, windshield replacement and anti-theft systems are common.

Private-Label Software

Software can also be private labeled. If a provider does not have experience building a menu or an automated F&I reporting system, a private-label partner may be the best option in terms of development costs, time to market and tech support infrastructure already in place.

“In recent years, we’ve moved away from private labeling our software because we’ve designed it to be completely customizable across the board,” Corbin continues. “This allows our agents to market our software at a fraction of the cost of building it on their own or even paying to private label. Plus, this is a way dealerships have access to our award-winning customer service and support teams should issues arise on implementation, training or otherwise.”

Private-Label Compliance and Training

Training programs are also candidates for private labeling. With a little research and effort, it should be easy to identify partners willing to build your brand while providing high-quality certification programs and training for F&I managers and other dealership personnel. In the long run, providing an effective training platform to the dealer that produces results is as valuable to your company as it is to the dealer. Numerous product providers attempt to offer dealerships the “complete package.” Their value propositions are compelling, and their results are often noteworthy. It is possible to compete toe-to-toe with the larger companies by carefully selecting private-label partners, diversifying your portfolio of offerings, and mitigating the risk of losing an account.

Legal compliance training and tools are also available for private labeling. Realistically, it is the only way to deliver the service as a component of an agency’s or product provider’s value proposition, as few such companies have the in-house legal, production, and software capability to reinvent that wheel.

“Compliance and training are at the core of every private-label program offered by Safe-Guard,” Haas says. “Our legal team ensures that all products are compliant in every state or province, and our regional trainers provide customized training for our customers. It is important to research any potential partner to make sure that training is a top priority and that no corners are cut on compliance and regulatory matters.”

By private labeling an established compliance program, providers can quickly provide a turn-key solution for all of their dealership clients. Such programs can include web-based deployment and verification of dealership employee handbooks and policy documents, legal compliance training that exposes employees to the laws they are required to follow, and even customized online product training. Once such a program is in place, the basic structure can even accommodate training aimed at Sales or F&I techniques, such as overcoming objections and menu selling.

Jim Ganther, an attorney and president of Mosaic Compliance Services, says his company acts as the compliance “back office” for numerous F&I agencies. “We are the go-to guys for agents in the field, allowing them to properly nudge their dealership clients towards more compliant practices. And adding a consistent layer of compliance awareness to those agents enhances both their credibility and their utility in the dealer’s eyes.”

So why private label? To return to the Melancholy Dane,

“We go to gain a little patch of ground,
That hath in it no profit but the name.”

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Inspection Company Roundup

Inspection Company Roundup

This month, P&A reached out to several of the nation’s leading inspection companies to find out more about what they do and how the industry works. We will continue to gather information on this topic and add more companies to our list of providers. If you would like to hear from anyone specifically, please let us know!

Click on the links below to learn more about One Guard Inspections, Southwest Inspections and Warranty Inspection Services and how their executives see the industry as it stands and where technology will lead them in the future.

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Mobile Menus

Mobile Menus

The technology available to dealers is constantly changing, and more and more companies are turning to the digital world for their F&I menus. Specifically, they are taking advantage of the application technology offered by iPad and Android tablets. The following companies are keeping up with this technology and reinventing the process of presenting F&I menus to customers.

IAS

IAS’ SmartPad was designed to be used during the transfer from the showroom to the F&I office. The application takes the form of a survey that can be customized for individual dealerships to help F&I managers shape their presentation before the customer enters their office. Answers can be sent to the managers in real time and negative comments (if any) can be flagged and addressed immediately. The SmartPad survey is available on the iPad, most Android tablets and the Blackberry Playbook.

The Impact Group

The Impact Group’s FUSION and FS Presentation menus are were designed with flexibility and simplicity in mind. Both offer paper and interactive presentation capabilities and are supported by an array of sales and presentation tools for each of the branded F&I products being offered. Any payment parameter (term, rate, cash down, monthly/biweekly payment, product), can be changed on the fly with instantaneous resulting calculations. These current production versions are available on Android tablets and the company reports that its next major release will be accessible through any mobile device.

iTapMenu

iTapMenu is an iPad-exclusive menu application that was launched in January with the goal of offering a customer-friendly and completely transparent selling process. iTap is built on a patent-pending, industry-exclusive “drag and drop” feature that allows the F&I manager or customer to drag any product or group of products into a “Customer Selections” column. The prices can then be recalculated so the customer knows exactly how much they’ll be paying each month.

MaximTrak

Created in 1982, MaximTrak has been adapting their business with technology ever since. MaximTrak has a suite of products that are designed to make the F&I process simple and quick for the customers. MaximTrak’s latest addition, MOBILETRAK, leverages their entire suite of products and provider connection and renders it completely mobile working with both the iPad and Android tablet devices. MOBILETRAK is a highly interactive consumer facing technology that customizes the sales presentation and the payments all in real-time from the convenience of a tablet. This application eliminates the need for inputting the same data in multiple places because it was designed to integrate with all major dealer management systems.

MenuSys

The standard offerings from MenuSys include desking, finance and service menus along with real-time reporting and more. The tablet version of MenuSys includes the company’s touch-enabled finance menus. Drag-and-drop technology enables F&I managers to move products between columns to create a customized suite of offerings. Additional features include the ability to present charts for select products, a customer interview interface and built-in compliance tools.

OptionSoft Technologies

OptionSoft Technologies came onto the F&I scene nearly 10 years ago. OptionSoft’s interactive product and dealer videos were designed to create a dealer-driven customer interview that supplies the F&I manager with insights into the individual customers needs and ease the customers’ concerns about the experience. This application is available on the iPad and also includes video presentations and product selections.

Ristken

Ristken offers web-based reporting and menu platforms, collaborative sales tools and a full suite of e-business solutions. The company is currently deploying a multimodule, multiphase mobile platform designed to extend the existing functionality of their ASP platforms while at the same time enhancing and adding functionality that is specifically suited to leverage the emerging mobile and tablet market. Ristken is certified with all major DMS providers, and offers comprehensive training and client support.

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Interview With AFIP’s Dave Robertson

Interview With AFIP’s Dave Robertson

This month, P&A caught up with Dave Robertson, executive director of the Association of Finance & Insurance Professionals, an international organization offering training and certification for F&I staff, managers and directors. Robertson is a longtime contributor to several leading auto finance publications, including F&I and Showroom magazine, and an in-demand speaker at industry events.

Tell us about AFIP and what the organization offers.

The Association of Finance & Insurance Professionals was founded in 1990 and is active in the United States, Canada and, pre-recession, select countries in Europe. At present, AFIP is establishing a branch in Brazil.

AFIP is a 501(c)(3) non-profit continuing education association whose primary mission is to certify F&I practitioners, dealership managers and the personnel of select captive and institutional lenders, aftermarket vendors and general agents to a recognized level of competency with the applicable state and federal regulations. AFIP also requires its certified members to sign and abide by an enforced code of conduct that holds the certified individuals personally accountable for what they tell a customer.

AFIP differs from all other F&I development curricula in that it focuses solely on the state and federal laws. The program is designed to be compatible with all existing training programs. In addition to providing accurate and updated regulatory information provided by the law firm of Hudson Cook LLP, AFIP redirects the contingent liability connected with this highly sensitive area away from the dealer or general education training provided to AFIP. AFIP Certification is the car dealer’s first line of defense.

After certifying tens of thousands of F&I practitioners for 22 years, AFIP has a record of only one AFIP-Certified F&I Professional getting his dealer in trouble.

Who are your target markets and what message would you like to give them?

Because it creates the dealer’s first line of defense — by preventing violations of the governing rules and redirecting liability — AFIP’s target market is the individuals who arrange financing and solicit aftermarket products in franchised, independent and BHPH / LHPH dealerships selling motorized conveyances of all types. The trend among dealers is to AFIP-certify anyone in the store who “touches the deal.”

The second major market is the dealer contact and F&I development personnel employed by the captive and institutional lenders, aftermarket vendors and independent general agents.

AFIP’s message is simple: F&I transactions conducted ethically and by the rules aren’t the subject of TV exposés, FTC or Department of Justice administrative action, or class-action lawsuits. The lender or vendor who is instrumental in getting a store’s F&I cadre AFIP-certified has established a bond with the dealer principal and F&I personnel that a competitor can’t break.

Tell us about yourself and the path that led you to the leadership of AFIP.

In 1989, an industry visionary by the name of Laurie Posella saw the need for an independent sanctioning body for the F&I trade. And so did Ford Motor Credit, GMAC, Bank of America, the company I owned at the time (Dealer Based Services) and many others. We provided the seed money and collectively developed the curriculum to meet AFIP’s primary objective. However, AFIP is unique among professional associations in that there are no regional chapters. There isn’t, for example, a San Diego chapter of AFIP.

Seeing the need to tie the benefits of AFIP certification to the services provided by its founding members, the firms and general agencies who join AFIP as industry-level members become the AFIP chapter. As such, any benefit that flows from AFIP to a car dealer does so under the auspices of an industry member. For example, FMCC is an AFIP chapter, as is Great Lakes Companies and hundreds of others.

I was among the founding members and, at the request of the board, assumed the executive director position. I later reincorporated AFIP in my own name and moved it from California to Texas. I have been active in the automobile industry for nearly 40 years.

How has the industry changed in the past five years, and how will it change in the near future?

Two ongoing evolutionary changes are directly affecting the F&I process. The first is the impact of the Internet on the buying and selling processes. The paperless F&I transaction will soon be commonplace. The second is the proliferation of consumer-oriented regulations and the heightened level of scrutiny from all quarters: state and federal regulators, the press, consumer advocacy groups and the plaintiff’s bar.

How do you like to spend your time off?

If I’m not working, I must be sleeping. In the short interludes between those two activities, I enjoy traveling with my wife, playing with my grandchildren, and contending with a spoiled-rotten dog. In addition, I recently completed an MBA and I’m currently pursuing a Ph.D. addressing business ethics.

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