Tag Archive | "David Neuenschwander"

NAE/NWAN Honored As A Medical Mutual Pillar Award Recipient For Community Service


CLEVELAND – National Automotive Experts (NAE/NWAN) is humbled to announce that they have been honored as one of the recipients of the Pillar Award. The Medical Mutual Pillar Award for Community Service, presented by Smart Business, honors businesses of all types and sizes that make outstanding contributions to their communities. Its purpose is to encourage a charitable environment, recognize creative efforts that make a difference, and demonstrate the ties between the for-profit and nonprofit worlds.

“We are so honored to have been recognized by Smart Business with this award,” said Kelly Price, Chief Executive Officer of NAE/NWAN. “I believe the company’s passion for community service transcends into everything we do and that is evident in our company culture,” said Price. “We are very forunate to have associates and partners that give without holding back. I have so much gratitude towards my team for their enthusiasm and dedication in giving back, especially in their support of the Cleveland Christian Home.”

Price set the mark high for her and her team. Her goal was to raise one million dollars for the Cleveland Christian Home (CCH). NAE/NWAN has reached this goal and they are still going. The money and time they have devoted have helped to buy school uniforms, build a new roof, and provide over 40 children with Christmas gifts. Although the CCH is the company’s main focus, NAE/NWAN also donates to the Martin Hennessey Inspiring Children Foundation, Megan Littlejohn Foundation, Safe Nest, and Susan G. Komen.

NAE/NWAN was presented with their award on December 6, 2017 at a 20th annual gala hosted by Smart Business at the La Centre™ Conference and Banquet Facility in Westlake, Ohio.

“We are so proud to be headquartered in Northeast Ohio. Cleveland is home for us and that is why we are so passionate about giving back to this community,” said David Neuenschwander, President of NAE/NWAN. “Kelly has shown us that giving back is so much more than providing financial support. She has instilled in us the importance of giving time, heart, soul, and plenty of smiles. This mentality has truly transformed NAE into a culture of passionate associates who make sure that those who don’t have enough, get enough. We march to that beat every single day as one team,” said Neuenschwander.

“NAE/NWAN is the type of organization and leadership team that truly understands the important symbiotic relationship between the for-profit and nonprofit worlds,” says Dustin S. Klein, publisher of Smart Business. “Their involvement in causes they care about underscores a real commitment to giving back. The impact is evident: NAE/NWAN is helping to strengthen the communities where we all live and work.”

To learn more about the Medical Mutual Pillar Award for Community Service, visit the Smart Business website, http://www.sbnonline.com/events/pillaraward/.

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NAE/NWAN Recognized by Weatherhead School of Management as a 2017 Weatherhead 100 Award Winner


CLEVELAND, Ohio – National Automotive Experts (NAE/NWAN) is honored to announce that they have been recognized by Case Western Reserve’s Weatherhead School of Management as one of their Weatherhead 100 Award Winners for 2017. Established in 1988, the Weatherhead 100 Awards honor the top 100 companies who are the best example of leadership, growth and success within Northeast Ohio. Companies that make the list are recognized for their percentage of revenue growth over the last 5 years. In order to qualify, companies must have net sales of at least $100,000 in year one, and over $1 million by year five. Winning companies must have also employed a minimum of 16 people full- time in the last year.

“It is humbling to be to be a company honored by the Weatherhead School of Management with this award ,” said Kelly Price, Chief Executive Officer of NAE/NWAN. “We built our company intent on making a difference, not only in our business relationships, but in the lives of our assoicates and with everyone we interact with on a daily basis. Part of our culture is an environment of constant gratitude, as our team works tirelessly at raising money for the Cleveland Christian Home, along with many other charities and organizations around Northeast Ohio and throughout the country,” said Mrs. Price. “I believe this culture has shaped our company into the organization it has become today, and I am grateful to my entire team for working together to achieve this level of success.”

NAE/NWAN was presented with their award on November 30, 2017 at a black-tie gala, hosted the Weatherhead School of Management at Hilton Cleveland Downtown, to honor the 30th Annual Weatherhead 100. The event was presented by BDO, along with several other companies throughout Northeast, Ohio. Over 700 of Northeast Ohio’s business leaders gathered to celebrate the premier companies in the region.

“We are committed, not only to running a successful business, but also changing people’s lives in the process,” said David Neuenschwander, President of NAE/NWAN. “We cannot have the mission-centric culture, or our success, without a strong commitment from our team. I make it a point to challenge our team to think differently and not to accept the status quo. I believe the commitment to our mission that our associates demonstrate on a daily basis attributes to us being where we are as a company today.”

“This year’s winners reflect the evolution and diversification of our region’s economy in the last 30 years,” said Michael Goldberg, an assistant professor at Case Western Reserve University’s Weatherhead School of Management, which compiles the annual ranking. “Their success is an endorsement of Northeast Ohio’s ability to grow companies and encourage entrepreneurship, which are essential to our economic future.”

Weatherhead School of Management makes it their mission to develop transformational ideas and outstanding leaders for the advancement of business and society. Weatherhead 100 companies are the embodiment of this pursuit. For more than 25 years, they’ve recognized the accomplishments of the region’s fastest-growing companies, and no matter the industry, companies across Northeast Ohio clammer to make the list. To learn more about the Weatherhead School of Management and Weatherhead 100 Award, visit their website, https://weatherhead.case.edu/events/weatherhead100/.

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The Big, Scary World of F&I


The first panel discussion of this year’s P&A Leadership Summit began at 2:05 p.m. on Tuesday, Aug. 30. Helmed by Jimmy Atkinson, senior vice president and COO of AUL Corp., “Threats Facing the F&I Industry” promised to tackle the various forces working against dealers, agents, product providers and third-party administrators (TPAs) today and in the near future.

Atkinson was joined by a diverse panel of experts that included David Pryor, CMO of Safe-Guard Products International, Mike Saint, lead risk analyst for Assurant Risk Management, and Tony Wanderon, CEO of National Auto Care, David Neuenschwander, vice president of National Automotive Experts (NAE)/NWAN, was unable to appear but did contribute questions to the panel.

Anticipating a Downturn

The discussion started off with a warning: Don’t get complacent. The panelists agreed that the automotive industry as a whole has been strong for the last few years, leading many to take success for granted and forget to ensure the basics are all covered.

“The challenging thing for me right now is a lot of companies seem to have forgotten the bad times,” Wanderon said. “Things have been good for so many years that they don’t really have a disaster recovery [plan] in place. I always get scared a little bit when things are so good — you forget the little things. Disaster recovery is figuring out your expenses, having all the right people in place and figuring out which business might be at risk.”

Pryor agreed, noting that new-vehicle sales have likely plateaued after passing the 17 million-unit mark in 2015.

“I think we’re looking at that and saying, ‘What’s next?’” Pryor said. “Dealers are resilient. They’re going to continue to look at ways to drive their bottom line and drive their profitability. As an administrator, there’s sometimes a silver lining when we do face a downturn, or at least an era of stagnant growth. Dealers start to look at other parts of their business.”

Specifically, Pryor noted, dealers will refocus on F&I and fixed operations, both of which are susceptible to inertia when times are good and cars are flying over the curb. He urged providers to offer a wide range of proven products that will maximize profits and customer satisfaction in any economic climate.

Virtual Reality

The subject then turned to the digitization of F&I, beginning with information about products on provider and dealer sites and evolving to an Amazon-like experience that would allow car buyers to select and price protection products the same way they spec the vehicle.

Whether the industry likes it or not, Pryor said, the virtual space is going to play a large role in the future of F&I.

“We know it’s coming. We can look at what has happened on the vehicle sales side,” Pryor said. “Customers are doing their shopping online. They’re only visiting 1.2 dealerships before making the decision to buy. The sales process is happening in the digital space.”

Atkinson reminded the panel that information about F&I products is already out there, but the typical source is a dissatisfied customer. “When a customer hits their phone and Googles an F&I product, the first thing they see is something negative.”

Wanderon agreed, noting that bad reviews are spreading faster than ever. “Social media is changing things for us in a lot of different ways,” he said. “I think it’s time for us as an industry to start talking about what we do and how we do it and how we take care of customers.”

As an example, Wanderon told a story of a working F&I manager who purchased a service contract he had sold to his own customers. When a strut had to be replaced, his claim was denied, and he took to social media to vent his frustrations — before contacting the provider. If he had, he would have learned that part wasn’t covered.

“To get a negative response, you don’t ever have to ask your customer to post that,” Wanderon pointed out. “They’re going to post it. But to get a positive response, you should be asking your customers to go out there and post for you the same way, especially when you’re doing things that are outside the coverage provisions of your contract and you’re making an exception for them.”

Saint agreed, saying that dealers and providers need to get more proactive. “I think anybody in F&I should be very prepared to offer instances where there was a positive [experience] for the customer. I think we all need to pick it up as far as having educational items on websites. Just like they spec out the car before they buy it, well, they should be able to spec out the products we have as well. Because the customers are more and more educated. That’s the avenue I think we can expand into.”

“It doesn’t have to be just the administrator,” Pryor said. “Ask your dealers to go out and put those things out there.” Using GAP coverage as an example, Pryor noted that finance sources are stretching terms and loan-to-value ratios, leaving car buyers underwater for historically long periods. “Here’s a great product that protects them. We see $20,000 and $30,000 checks going out. That makes a huge difference to someone. … So how do we get them to go online and push that message out there? ‘This is a great product, I had a great experience with it.’”

Turning the discussion back to putting information about products on dealer sites, Wanderon cautioned that could cause complacency to rear its ugly head in the finance office.

“It’s easy for the F&I manager to think it’s a shortcut,” Wanderon said. “‘It’s online, so I don’t have to present it.’ The biggest reason they don’t sell products is that they don’t present them. We don’t want to let that be a crutch.”

A Captive Audience

To the likely surprise of some attendees, Wanderon raised the specter of a rarely mentioned threat to the F&I industry: captive reinsurance companies. They can be a great source of revenue for some dealers — particularly high-volume dealers — but they can lead to disaster for others.

“Dealers think that because they sell five cars a month, they should own their own company and make all the money,” Wanderon said. “Everybody wants to be someone else in this business. The problem that then comes into play is the agent or our distribution channel partners maybe aren’t educated enough to say, ‘Maybe that’s not right for you.’ Our job in the industry is to educate them on where the best option is — not where we make the most money, but where the best option is.”

“I think it’s amazing how much misinformation is out there,” Pryor added. “We still hear from dealers, ‘What do you mean it could go the other way?’ They don’t understand that they might have to write a check if the underlying products don’t perform. And good luck collecting on that if the dealer is in a cash crunch. They need to understand the economics of it and they need to understand the risk of it.”

“The dealer obviously has to be aware they’re on the hook until the tails of those contracts go away,” Saint said. “And you know some of the rewards don’t outweigh it. It has to be managed very well, but much more than that, it’s a risk that’s not for everyone.”

Part of what is fueling this trend, the panel agreed, is that dealers want more cash, and they want more of it upfront. So agents and providers are scrambling to write deals that, ultimately, aren’t a great fit for anyone.

“I’ve seen some crazy stuff, from dealer advances, from fee structures, and for the dealers who have cash-flow issues,” Wanderon said. “I saw one dealer who had $100,000 in the bank and a net worth of $22 million, and he wanted $4.5 million for 250 contracts. That’s a lot of money for 250 contracts at a $95 admin deal. Sometimes I think we hurt ourselves by competing to some of the levels that we do to get a deal, and ultimately that deal goes bad.”

Pricing the Future

Atkinson then brought up the subject of rapidly advancing in-vehicle technology and the pricing challenges it brings. “We’re pricing products that are going to have three-, five-, seven-year lifetime tails,” he said. “And we’re pricing to replace parts in that vehicle that we don’t really have a clue what it’s going to cost in three, five or seven years to repair.”

Complicating the situation, Saint added, are services such as “Vehicle Manager,” a new feature that allows OnStar users to self-initiate a diagnostic check.

“Does the claim qualify for coverage if the on-board system is telling the consumer you’re possibly going to have a problem or you have a problem?” asked Saint. “It still has to go to a technician to confirm whether it qualifies for coverage or not. That’s going to stay the same until the software gets so elaborate that there’s very [few] people who can use it.”

Adding to that uncertainty is that some systems are designed to alert drivers before a part fails — a great selling point, but one that can add both cost and frustration to an already complex situation.

“If the alternator fails, is it covered? Yes. If your OnStar says your alternator will fail within 1,000 miles, and the customer takes it to the dealership, and it’s still functioning at the dealership, is that covered?” Atkinson asked.

“We’ve seen the same thing,” Pryor said. “The frequencies are going up and that’s what’s driving it. … Under our terms and conditions, an OnStar alert would not be covered. The customer has probably become accustomed to that.”

“Everybody keeps saying the car business is the car business. No, it’s not,” Wanderon said in response. “Look at the total losses on GAP. There are more total losses now because of all the sensors and bumpers and airbags and it puts the car over the 50% limit. So it becomes more expensive to change, and we don’t know how much it costs when you don’t price it.”

A Sharing Economy

The discussion closed with the subject of commercial use of private vehicles, specifically among drivers for ride-hailing services such as Uber and Lyft. The panel agreed that vehicles used for livery were a grade above a privately owned pickup truck a construction worker uses to drive to job sites or a sedan a Realtor uses to drive from property to property. Should those vehicles be excluded, Atkinson asked?

“I have to believe, with how those companies have expanded worldwide, that we have to have thousands of them on the books right now that we don’t even know about,” Saint pointed out. “Traditionally, we haven’t covered taxis. Ride-sharing is a little different. This customer owns their car. They have a certain amount of maintenance and upkeep they have to have to be an Uber driver. … I don’t think we’re seeing a negative impact from it. There’s a lot of miles [on those units] and they drive out of their warranty really quickly.”

“I think it’s really a definition of what ‘commercial’ is,” said Wanderon. “Are we going to change that within our policy provisions? The challenge becomes, could you put a surcharge on it to say commercial is in there? Yeah, but you know who’s paying the surcharge? It’s the dealer, because they’re not charging them any more to buy that contract, they’re just eating up their profits. And then, ultimately, you have to deal with it when you have a claim. We need to start looking at pricing. You’re going to have a percentage of the cars that are going to have commercial utilization.”

Pryor agreed, noting he knows his company and others are covering vehicles in the “gray area” of commercial use.

“We know we’re paying claims on Uber vehicles,” Pryor said. “Every so often, you send an inspector out and you’ll get the picture back with the big Uber sticker in the window. We know those are happening. I think it does come down to the mileage and the usage.” As more U.S. vehicles enter the ride-hailing fleet, Pryor added, more drivers will rely on them as a direct source of income. “It starts to change the dynamic with the customer. We have to think about that.”

Noting that Uber is already offering new-vehicle financing options to new drivers, Wanderon said the real threat lies in the company’s foray into the F&I segment.

“I expect that they would have a service contract and a maintenance program out there at some point,” he said. “Their customer program is based on having a nice car and having it available. So that model is going to have some impact on us at some point.”

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To Cover or Not To Cover – The Future of Vehicle Technology


In 1939, vehicle buyers were offered the option to upgrade their new vehicle to the first available fully automatic, mass produced transmission – the Oldsmobile Hydra-Matic Drive. The option cost buyers a whopping $57. Today, technology has increased by leaps and bounds, opening the door to a new era of vehicles that no one could have dreamed of in 1939. Features in automobiles that were once the makings of science fiction will soon become the norm as automobile manufacturers rapidly take the role of leader in innovative technology. And service contract providers should no doubt begin to think about how to adapt coverage to account for the increasing role technology will play in tomorrow’s vehicles.

The days of the automotive industry “borrowing” established technology from other industries could well be coming to an end. In-vehicle technology is seen as the newest path for automakers to separate themselves from the pack and the technology requirements to deliver to it are not necessarily available from other industries. The 2014 Detroit Auto Show was brimming with technology-laden vehicles. Consumers who have become tethered to their smart phones now demand vehicles with the ability to keep them connected to their digital lifestyle, and this consumer demand for technology is expected to continue driving automotive innovation. A study by consulting firm, Accenture showed that in-vehicle technology is the top selling point for 39% of car buyers today.

Tony Wanderon, CEO, National Auto Care (NAC) recalls the days when picking out a new paint color was one of the most exciting things about buying a new car. “Now, it’s completely different. Cars have so many new telematics from just a few years ago, its hard to keep up with all the new features technology offers.”

Many companies plan on including their newest and best technology on smaller, less expensive models that are more affordable to younger generations. Ford has embraced this line of thinking and already offers lane assist, rear view cameras, Sync and blind spot detection on the Focus. Other companies are also showcasing big technology on more affordable models, with back up cameras, Bluetooth technology, parking assist and automated braking now being offered on many lower-end models.

National Automotive Experts’ Vice President, David Neuenschwander, says the younger generation is not only technology savvy, they are technology spoiled. “It is all cool stuff – all the things that will change and emerge in vehicle technology. The futuristic components and abilities will help us all from a retail standpoint, but how do we mitigate or control from a pricing standpoint what those losses will look like? Maybe for the first time, it will put service contract providers in an uncomfortable position.”

As recently as 40 years ago, electronic controls were practically unheard of. In the early 90’s electronics accounted for about 15% of the cost of a vehicle. Today, the cost of software and electronics in vehicles is fast approaching half of the cost of the vehicle itself. Some estimate the cost is already as high as 40% in luxury models. At the same time, many auto manufacturers are now looking to the annual Vegas Consumer Electronics Show as one of the most important shows in the auto industry, as connected cars become the hottest cars that dealerships have to offer and software development for vehicles continues to move at warp speed.

Accounting for the Increase in “Connectedness”

There are few things in new vehicles that are not managed by Electronic Control Units (ECUs). For example, ECUs currently manage systems such as the drivetrain, brakes, and entertainment system. Even low-end vehicles have between 30 to 50 ECUs and high-end, newer cars have close to 100 million lines of software code. The steering was among the last component to be taken over digitally, now that it is frequently supplemented with driver-assist systems. In many cars, the parking brake may, in fact, be the last component that remains solely under manual control in today’s vehicles.

The increasing level of complexity in vehicle technology brings with it issues of reliability – studies have shown that manufacturer warranty costs are highly correlated with the cost of the vehicle’s electronics and software. We may see VSCs adapting for this as well. And since much of the technology is difficult and costly to repair, it is typically cheaper to replace malfunctioning components rather than repair them. In addition, vehicles damaged in a collision may be more likely to be declared a total loss due to the cost of the embedded technology.

“As technology continues to advance,” says Brent Allen, president and COO, StoneEagle.com, “it is going to be more expensive, so you will definitely see costs of VSCs changing as actuaries have to start taking into account the different new electronics on vehicles. I don’t even know if there are VSCs for a car like a Tesla. It is such new technology, I am not sure if actuaries even have enough information to know how to price coverage.”

Renowned researcher, IHS Automotive, predicts that the number of cars connected to the Internet worldwide will reach 152 million by 2020 – about six times the current number of connected cars today. British consulting firm, Machina Research predicts 90 percent of cars will be connected to the Internet by 2020. Many see cars becoming just another device connected by the “Internet of Things” (IoT). The IoT represents the future of connected technology embedded into everyday objects, from your car to kitchen appliances, street lamps, cell phones, medical equipment, your wallet – the list goes on and on.

So how can technology be accounted for by warranty companies when significant advances are happing so quickly? Neuenschwander, says simply that warranty companies can’t account for it. The advancements in automotive technology are putting warranty companies in a new position and time is going to be a luxury they don’t have. “Historically, we have leveraged what the manufacturers have done, from a cost and a durability standpoint, looking at underwriting tables and results. We have had at least three years on a manufacturers warranty in the past. But in the future, with people trading in cars more frequently and with lower miles, I don’t think the service contract industry will have that window of time to study and get comfortable with that emergent technology anymore. I think that in some cases, we are going to be on the hook for providing coverage and pricing for it within the year – which is not a position we have ever been faced with. “[The technology advances] are all very positive but not something we are accustomed to.”

“Our business has typically been viewed as consistent,” Wanderon noted, “but today, I think it is the riskiest it has been in some time because we don’t know what technology is going to be like in the future, and so we will have to play catch up.”

Augmented Reality

The Blurring of Virtual and Physical Worlds

Many automotive suppliers’ top focus is now software engineering and integration. Some high-end manufacturers have plans to offer future telematics options that will increase vehicle cost by $10,000 or more. Many expect to see great innovation in the future for touch screens. The current technology in many models is not up to speed with that of hand held devices, and is expected to become much more intuitive in future models.

Before the advent of the windshield, early motorists relied on driving goggles. As the windshield itself now evolves, tomorrow’s drivers might be giving up their dashboard displays altogether and instead, relying on heads up displays projected right onto their windshield. Interior controls utilizing knobs and buttons are likely to become a thing of the past, as manufacturers develop controls that rely on gestures and eye movements. In addition, future heads up displays will utilize a combination of reality and virtual reality to project navigation, warnings and other vital information to drivers. By projecting larger, colorful displays onto the windshield, drivers will be able to readily access a variety of information without ever having to take their eyes off the road.

Land Rover is exploring the world of augmented reality in vehicles with what they are calling a “virtual windscreen” and “transparent bonnet.” They hope to provide drivers with an interactive, virtual image on the car’s head-up display that uses the entire windshield – making driving similar to playing a video game. The windshield display concept would feature virtual lanes and drivers would be able to navigate around virtual cones – something that could be useful in driver-training courses. It would also allow them to project virtual cars that the driver could race – clearly not a technology that is applicable outside of the racing industry. The transparent bonnet (or hood) concept utilizes wide angle cameras in the car’s grill and will then project the image on the windscreen so that the hood appears semi-transparent to the driver, allowing them to see not only what is underneath the vehicle, but the angle of the front wheels. For now, however, the transparent hood and virtual windscreen are still concepts with no launch date predicted.

The growing debate on whether or not technology reduces or adds to driver distraction may require that the driver utilize much of the new technology before driving. Steve Amos, president, Gulf States Financial Services (GSFS), likens it to a preflight checklist. “Before you even start driving you have to check so many things – have you got your iPod plugged in, your seatbelt on, trip odometer set, and so forth. Pretty soon manufacturers are going to need a checklist that displays a listing of all the driver’s options. When you enter the vehicle, the car could notify you to press a button if you want the car to preset all of your preferences for you. So when you get in, all you have to do is press the default button and it highlights and engages all of your preferences, instead of having to go in and select each and every one of them every time.”

Similar to the iPhone’s Siri, more vehicles in the future will be equipped with voice recognition, that allows the driver to operate controls hands-free, and the voice recognition which has not been the best is expected to improve. Earlier this year, Apple announced that their new CarPlay technology will enable drivers use their iPhone in their vehicle with voice commands or steering-wheel buttons. CarPlay will be seen on a number of models this year and dozens of other manufacturers have committed to offering it in the coming years.

The Driverless Vehicle

Various types of emergent self-driving technology are expected to become more widespread, such as crash avoidance, parking assist, lane monitoring, etc … While the self-driving technology takes over, typically for under ten seconds – it must incorporate significant information about the vehicle’s surroundings to operate safely and effectively and use artificial intelligence to process the information. Sensors, lasers, cameras, lidar (used to calculate distances between the vehicle and other vehicles and objects) and radar systems are all important pieces in the successful autonomous functioning capability – regardless of the degree of their autonomy.

Audi’s first automated car had Tampa highways closed briefly for its maiden test-drive in July. Audi also showed off its self-driving technology at the 2014 Consumer Electronic Show, demonstrating cars that could park themselves without a driver behind the wheel at all. Honda has their own driverless valet technology in the works, utilizing wi-fi enabled cars that communicate with strategically placed mirrors in a parking garage. With both manufacturers, the driver is able to exit the vehicle and with the touch of a button on their smart phone, have their own driverless valet service.

Long before driverless vehicles become legal and available to the general public, assisted-driving features will continue to grow in prominence, laying the foundation for future self-driving vehicles. Driver-assist technology that can take over navigation in stop-and-go traffic is one such technology in the works. Audi is currently developing a driver-assist technology that can take over the vehicle in an emergency to prevent a crash in everyday traffic conditions. Audi currently offers an assisted cruise control with the ability to regulate the vehicle’s speed, considering the speed and distance of the vehicle ahead. This technology functions at speeds up to 155 mph. Mercedes is offering Intelligent Drive, a safety and technology assistance package that utilizes 36 separate technologies, including traffic-jam assist – a feature that allows the car to steer, drive and accelerate autonomously as long as the car does not exceed 37 mph. Lexus and Infinity have similar futuristic technologies in the works. In fact, almost all car manufacturers are working to develop and incorporate their own form of automated-driving technology.

With such advances appearing in new models, providers may be hard pressed to stay on top of the technology. “With some of the new technologies,” says Neuenschwander, “if we don’t keep our eye on that ball, then all of us – the whole industry – is going to find itself in an upside-down financial position.”

The Real Cost of Technology

Are automotive manufacturers going to follow in the footsteps of the early 1990’s PC industry and overlook security until high profile attacks occur? As the connectivity in vehicles increases, so does their vulnerability. All of the systems monitored or operated through the use of computers present a channel for malicious vehicle compromise. Conveniences in today’s luxury vehicles such as automated parallel parking, Bluetooth, wireless hotspots, digital tire pressure readings, keyless entry, RFID car keys, satellite or digital radio, GPS, and digital media ports all present vulnerability. The advances the industry is making in the name of safety and convenience could come at the cost of relinquishing some degree of privacy and control, and increasing vulnerability.

Even an automobile’s media system can be used to access various internal networks within a vehicle. A vehicle’s audio system, for example, could be compromised through the upload of firmware using a doctored CD. This would then allow someone to maliciously take remote control of the vehicle’s telematics. The perpetrator could then do many things including, for example, extract the vehicle’s location and use the vehicle’s Bluetooth speakers to listen in to on-board conversations.

Allen thinks this could be a real issue in the future. “Its one of the things I find most alarming. There is no question – it is going to happen and it really bothers me. Thieves could hack into a system and use the technology to locate very specific kinds of cars to steal. There is so much GPS technology now in our cars, that there is bound to be that criminal element that figures out how to use it for their advantage.” He could therefore imagine future F&I products that offer some type of digital encryption coupled with a specialized GAP policy for theft.

Some developers of technology are also looking to redundancy to prevent the failure of one system from leading to the failure of others. By offering more than one separate, independent means of operation, technology researchers and developers hope to prevent disasters resulting from system failures. The use of redundancy will likely be critical in preventing disastrous failures, but may also be an effective strategy for protecting systems such as braking, which are more prone to deliberate attack by hackers.

A joint research paper between University of California and the University of Washington titled, Comprehensive Experimental Analyses of Automotive Attack Surfaces, was the among the first to consider “the full external attack surface of the contemporary automobile.” They characterized threat models and experimentally demonstrated the practicality of remote threats, remote control, and remote data exfiltration. Their research is intended to be eye opening to the industry – exposing how easily vehicles can be hacked and the researchers aimed to provide direction on how to “better secure the automotive platform in the future.” Whether the reality of this type of research sinks in or not is yet to be determined.

Government Push for Safety Technology

The federal government has historically been a driving force, pushing manufacturers to add the newest and most advanced vehicle safety features as they did by requiring air bags and seatbelts. Technology itself is now at the top of their agenda. The back up camera will be required in all new vehicles in 2016 and they say mandating V2V (Vehicle 2 Vehicle) technology will be next. Vehicles equipped with V2V devices emit a short-range signal ten times per second and also look for signals being emitted from other vehicles. The information would be used to alert drivers of potential hazards.Eight major automotive manufacturers provided support for a joint research study between theUniversity of Michigan Transportation Research Institute and the U.S. Department of Transportation. The study involved around 3000 cars, trucks and busses fitted with V2V technology.Vehicle-to-infrastructure (V2I) technology is also being explored. This would expand vehicle communication by allowing vehicles equipped with the technology to communicate with stoplights and road signs, and provide real time information on traffic as well as offering detours to avoid congestion. The National Highway Traffic Safety Administration (NHTSA) predicts that the V2V technology could reduce up to 80% of vehicle crashes. Once required on new vehicles, the same technology could be retrofitted on older models and even into cell phones, which would also enable vehicles to detect pedestrians.

In July, President Obama spoke at the Turner-Fairbank Highway Research Center in McLean, Virginia on the importance of investing in new vehicle technology that will make driving smarter and safer. But as the government pushes for V2V and also tighter requirements on fuel efficiency, concerns are being raised about the cost of compliance.

V2V technology is expected to add weight and increase the cost of vehicles. The Detroit News reported that by 2025, V2V technology could increase the cost of a new car by $3,000. The extra weight is also a concern for manufacturers who are already exploring the use of alternatives to steel, such as aluminum and magnesium, to meet the demand for increased fuel efficiency. NADA says that the 54.5-mpg standard that the White House is pushing for could add $5,000 to new 2025 model prices.

Future Technology and F&I

Neuenschwander says he could “absolutely imagine” a package that would be priced separately or as a surcharge to cover new technology in vehicles in the future – service that is afforded separately, based on whatever the technology is, at least early on. “This would save many companies a lot of trouble with changing terms and coverage quickly. For years, it took four to five years before there were enough significant changes in vehicles to prompt changes on a service contract. I don’t think we will see that length of cycle going forward.”

The technology in cars isn’t the only thing growing and evolving in the industry; the way people are buying cars is also changing with technology. As online buyers increase in number, so does the difficulty for the F&I office to deliver effective presentations to online customers. Allen thinks the offerings of future technology will extend beyond the vehicle itself and offer the solution for presenting and selling F&I products to online customers. “I’d like the dealer to come out to my house, sit down in my living room with an iPad, sign all the paperwork, bring the keys, and give their F&I pitch. When they bring the car, they would have the opportunity to present service contracts and other F&I products in a comfortable environment, just as they would have done in the dealership.” Allen says that companies are already working to create a seamless interface and use eSignatures that would allow for the whole sales transaction to take place anywhere, just using a mobile device.

What Car Enthusiasts are Excited About

Allen sayshe is most excited about seeing technologies come into play that make cars more fuel efficient AND more fun to drive. He is least excited about the possibility of increased automation taking the driver’s experience out of the car. “Because my bend is towards performance, when you take performance out of the car, it becomes boring. A certain amount of technology is a great thing, but too much can be a bad thing. Drive-by-wire throttles and steering have a tendency to make the car feel less engaged and I’m not in love with that type of experience.”

Amos also looks forward to high performance vehicles becoming more fuel-efficient.

As a part time racecar instructor, he says racecars have already mastered this through the use of hybrid technology with gas-powered motors. “In terms of top speed, power, torque, and fuel economy, the technology is here, but you are not seeing it except on the big, highly budgeted, factory-backed race cars – and this is pretty unaffordable even to most racers. But it is out there, and they are winning races with it. Electric cars have this now – tons of power as soon as you turn them on, but they just don’t go very far… and they don’t make that good engine sound yet!”

As far as vehicles outside the racing arena, Amos thinks the coolest new offering is the back up camera. He says this is a technology that he has really come to rely on, as it improves safety and is a big help when backing out of a parking place when the driver’s view is obstructed.

Wanderon is most looking forward to future technology lending itself to remote repairs, similar to the way your cable TV company can remotely update your cable box. “Not having to take your vehicle in for service would be a huge benefit. If they could do off-site repairs or updates electronically it would eliminate the need to take your car in for service as often. This could also be a way to handle certain vehicle recalls – remedying a problem by updating or repairing software remotely. It would save a lot of time and inconvenience for everyone.”

With so many leading edge technologies already available, Neuenschwander says today’s luxury cars have the technology to keep drivers safer than ever before. “Some luxury cars pretty much won’t let you get in an accident with their adaptive cruise control, lane change monitoring and automatic braking technology. The technology can cause a car to stop itself before it hits something.”

Despite the uncertainty the technology may cause underwriters, everyone seems quite excited about the automotive advances that the future holds. Cars are expected to advance more during the next 20 years than they have since they were invented, and Amos expects that could occur even sooner. “It is an exciting time to be around cars and be in this industry,” says Amos, “and it is only going to get better!”

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NAE’s David Neuenschwander Promoted to Director of Agency Development


CLEVELAND – David Neuenschwander, formerly a Regional Manager for National Automotive Experts (previously a Divisional Manager for Zurich), has been promoted to their Director of Agency Development. Neuenschwander has been with the NAE team since April of 2010 and has been working with their Executive Vice President in developing and maintaining agency relationships throughout the United States. During this time, NAE has experienced 200% growth year-over-year.
  
“NAE is very proud of the intensity and passion that David brings to the table. Our agents and dealers appreciate the experience and knowledge that he is able to provide them. We believe that he will make a great leader of our sales team.” said Bob Mancuso, Executive Vice President of National Automotive Experts. 

“With the addition of many quality individuals like Jeff Tabor (formerly of Zurich), Joe Ryan (formerly of Dimension) and Greg Martin (formerly of David Lewis), we believe that David will not only be a great leader to our sales team, but that we will continue to provide a level of service that surpasses that of our competitors.”

“My time with NAE has shown me that with creativity, flexibility and true passion for serving agents and dealers, anything is possible.” said Neuenschwander. “NAE has allowed me to showcase my talents and provide the solutions that agents are looking for. Now it is my challenge to help our sales team support and deliver that same passion to our agents.”
 
David and his wife, Jody recently moved to Joplin, MO with their three daughters.

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