Tag Archive | "F&I"

UDS Launches F&I Webinar Series for Dealer Partners

CLEARWATER, Fla. – United Development Systems, Inc. (UDS) has launched the UDS Webinar Series – aimed at bringing its award-winning F&I Training directly to its partners.

“Our promise to our dealer partners is monthly training on various F&I related topics,” said Randy Crisorio, UDS president and CEO. “Using webinar technology will allow us to more conveniently and consistently deliver on that promise to present quality F&I training solutions.”

The UDS Webinar Series will consist of monthly online sessions covering a variety of F&I-related topics. Planned topics will range from The F&I Interview Process, to Lender Relations, Compliance, and AutoMenu(TM) Selling Strategies.

Each webinar will last 60 minutes or less, enabling even the busiest of managers an opportunity to login and participate. Additionally, UDS dealer partners will have unlimited access to archived sessions via its websites’ partner portal.

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Zurich Enhances F&I Product Offerings with Zurich Shield Windshield Protection

SCHAUMBURG, Ill. – Automobile dealers can now offer their customers a full array of finance and insurance (F&I) products from Zurich, a provider of F&I products for automotive businesses in the United States, with the release of Zurich’s new F&I product – Zurich ShieldTM Windshield Protection.

According to Tina Mallie, head of Direct Markets for Zurich’s North America Commercial business, current research shows new-vehicle buyers are holding on to their cars and trucks for longer periods, making quality F&I products like Zurich ShieldTM an even more valuable profit-generator for automobile dealers’ than ever before.

Zurich ShieldTM Windshield Protection is an addition to the already popular Zurich ShieldTM Environmental Protection product, which was designed to protect the interior and exterior of a vehicle from harmful elements, road grime, stains and normal wear and tear.

Mallie said, “Another selling point for automobile dealers to share with their customers is how Zurich’s F&I products can also increase the resale value of a vehicle by providing a defense mechanism against exterior and interior damage.”

Zurich also offers automobile, truck and powersport dealers the following F&I products:

  • Vehicle service contracts
  • Certified vehicle program
  • Maintenance program
  • Road hazard tire & wheel
  • Guaranteed Auto Protection (GAP)
  • Universal Security Guard® theft-deterrent system

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JM&A May Buy F&I Companies to Grow in West

Financial services giant JM&A Group, a powerhouse in the Southeast, is aiming to grow in the rest of the United States. The main target for expansion is the West, and JM&A executives say they will consider purchasing smaller providers to pick up share in the finance and insurance market, reported Automotive News. But executives also have expanded the sales team and increased marketing and incentive budgets to help pitch JM&A’s services to large dealership groups west of the Mississippi.

That market is largely untapped by JM&A, a unit of JM Family Enterprises, the Deerfield Beach, Fla., company founded by Jim Moran. The F&I unit got its start 32 years ago acting as a captive finance company for Toyota dealerships in Florida, Georgia, Alabama and the Carolinas that were serviced by JM’s Southeast Toyota, exclusive distributor of Toyota and Lexus vehicles in that corner of the country.

“We have a 30 percent market share in the Southeast, and there is no reason we couldn’t achieve the same market share over time across the country,” said Colin Brown, CEO of JM Family Enterprises. “There is a lot of growth out there” even if industry volumes don’t come back, he said.

That share — or penetration rate — means JM&A sells at least one product on three of every 10 new and used vehicles sold in the Southeast. On the East Coast, penetration is 8 percent. It’s 6.6 percent in the West and even lower in major Western states such as California and Nevada.

“As we get beyond where we started, the opportunity tends to really stick out,” said Forrest Heathcott, president of JM&A. “Those are some pretty key markets where there’s a lot of population.”

In the next five years, JM&A intends to boost penetration in the West to 10 percent, Heathcott said. He said it could take 15 years to match the 30 percent share of the Southeast.

“These are big decisions for dealers to make, and they don’t come quickly,” Heathcott said.

To accelerate the expansion, JM&A has “budgeted for some very thoughtful, formidable acquisitions,” Heathcott said. He wouldn’t share numbers but said JM&A already is in discussions with independent agencies and smaller insurance companies.

Heathcott said JM&A increased its marketing and incentive budgets about 25 percent each this year. Incentives typically include dealer rewards or trips.

Growth by acquisition would be a first for JM&A, Heathcott said. The acquisition target area includes California, Washington, Oregon, Arizona, Texas, Oklahoma and Colorado.

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Auto Dealers Could See New Financial Regulations

Le-Eunice L’Minggio of Delavan, Wis., getting by on modest disability checks from Social Security, needed a car for regular weekly visits to her aunt on Chicago’s South Side.

The sales team at Thrifty Car Sales of Melrose Park, Ill., helped her pick out an $8,000 2004 Ford Freestar station wagon with a cracked mirror, a busted bumper, a broken taillight covered in tape and wipers that clawed the windshield, USA Today reported.

After she signed some papers, made a $1,200 down payment and drove home in the Freestar, things started to get weird. The dealership’s finance manager summoned her back a few days later and told her that she needed to lie to the finance company to get a loan. Specifically, he wanted her to say she was working at a steel mill for $5,000 a month. When she refused, he demanded full payment for the wagon. She returned the Freestar instead, but the dealership wouldn’t give her back her down payment.

L’Minggio, 64, went to federal court and won $13,200 in damages. But the dealership had gone out of business. “We were unable to collect the judgment,” says her lawyer, Michelle Weinberg.

Car shoppers such as L’Minggio might soon have a new advocate when they start to talk financing at their local car dealerships. Congress on Thursday began working on a final version of sweeping financial reform legislation that could subject auto dealerships to regulation by a new consumer financial protection agency. If the measure survives, dealers’ F&I (finance and insurance) staff would be regulated like bankers and mortgage brokers.

The powerful auto dealers’ lobby is fighting back. “Main Street auto dealerships should not be in a Wall Street reform bill,” David Regan, vice president of legislative affairs at the National Automobile Dealers Association, said in a statement last week. “Auto dealerships are not banks.” The association warns that new regulation would drive up the cost of auto loans.

Auto dealers last year persuaded the House of Representatives to exempt them from regulation by the new consumer financial protection agency. But the Senate version of the reform bill would let the new agency crack down on abusive auto-lending practices at dealerships. Now, envoys from the House and Senate are trying to work out differences between their two versions. And the lobbying has resumed in earnest.

In a report last year, the Cambridge Winter Center for Financial Institutions Policy concluded that exempting auto dealerships would be a “step in the wrong direction for consumer protection in auto finance.” The non-partisan think tank noted that auto dealerships originate 79% of auto loans and leases and “that auto finance is demonstrably susceptible to unfair and deceptive practices.”

Moreover, Cambridge Winter argues that an exemption would give auto dealerships’ finance departments an unfair advantage over credit unions and small banks, which would face regulation. Not surprisingly, credit unions and community banks want to see auto dealers treated like any other lender. “What they do is fundamentally the same as what a mortgage broker does,” says Steve Verdier, director of congressional relations at the Independent Community Bankers of America.

“The dealers all say, ‘We don’t get involved in financing,’ ” says Virginia lawyer Robin Abbott. “Nothing could be further from the truth.”

Avoiding Embarrassment

The finance departments at auto dealerships check car buyers’ credit histories and market and price loans that end up being made by banks or the finance arms of auto manufacturers such as General Motors or Toyota. Dealers “routinely mark up loan offers, typically collecting the equivalent of half of the resultant excess finance charges as bounty,” Cambridge Winter reported.

Abbott says some of her clients have fallen victim to one of the most common scams in auto lending — the “yo-yo” financing trap.

It works like this: A car buyer, usually with an iffy credit history, comes into the dealership, trades in a car, reaches what he thinks is an agreement on loan terms, and drives away in his new car. What the happy car buyer probably doesn’t realize was that among the many papers he signed was one acknowledging that the deal was contingent upon a third-party lender approving the financing. A few days or weeks later — if the dealer hasn’t found a willing lender — the buyer gets a call summoning him back to the dealer to negotiate a new loan or return the car.

Many consumers will agree to tougher loan terms to avoid embarrassment after showing off the new car to their friends.

“Don’t let the manager … keep you from being able to read the documents, telling you just to ‘sign here,’ ” says Rosemary Shahan, president of Consumers for Auto Reliability and Safety in Sacramento. “Take the filled-out forms and go sit down and … pore over them. You may find that you negotiated a good deal verbally, but what is in writing could be very different. … If they switched the terms on you, walk away.”

Consumer advocates say unscrupulous dealers prey disproportionately on young, financially unsophisticated soldiers, which is why the secretaries of the Army and the Air Force have come out publicly in favor of subjecting auto dealers to consumer financial regulation. Regan of the dealers’ association rejects the charges, saying there’s no proof that auto dealers target military personnel.

The legal office at Camp Lejeune in North Carolina put together a list of Marines there who have been victimized by auto dealers. Among them: a Marine who traded in a car only to learn that the dealer hadn’t paid off the trade-in, leaving him with two monthly car payments and only one car.

“Outside every military base in the country, there is a string of car dealerships selling overpriced cars,” says Tom Domonoske, a Harrisonburg, Va., lawyer who trains military attorneys on consumer law. Soldiers “leave home for the first time. They are making decisions with their own paycheck in a way that other 18- or 19-year-olds aren’t. … They walk on the car lot, and the car dealer takes them to the cleaners.”

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