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Don’t Skip the Warranty Review

Eric Fifield Executive Vice President EFG Companies
Contributing Author:
Eric Fifield
Chief Revenue Officer
EFG Companies

Here’s the scenario. It’s a busy Saturday. Every F&I manager is working a deal, and there are still two customers waiting to start the finance process. What’s an F&I manager to do? You don’t want to lose customers due to a long wait, but you also want to make the most on each deal. In an effort to speed up the F&I process, it’s all too common for F&I managers to rush certain aspects, like the manufacturer’s warranty review.

However, this could lead to several pitfalls for your dealership, making the F&I process longer and leaving you open to noncompliance. Under the Magnuson Moss Warranty Act, all dealers are required to provide detailed information about warranty coverage before a customer purchases a vehicle for personal, family or household use. This helps ensure that customers know what to expect in the event something goes wrong, and it enables them to compare coverage on vehicles.

So, if a vehicle comes with a manufacturer’s warranty, or complimentary coverage of any kind, your dealership is required to inform customers of the coverage. Additionally, if an F&I manager rushes the warranty review, they miss the opportunity to identify potential consumer needs or concerns that could be filled with consumer protection products. This could lead to a much longer product presentation and negotiation process, lengthening the F&I process as a whole and potentially reducing product penetration and PRU.

The manufacturer’s warranty review is about much more than identifying what the warranty covers. Effective managers use this review to identify areas of necessary coverage and build value in consumer protection products before the product presentation.

For example, if a customer is financing a vehicle for 72 months, but a majority of the manufacturer’s warranty ends after three years, you could use the review to point out that the customer’s investment will not have the same protection for the last three years of their loan.

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EFG Companies Names Steve Roennau as Vice President of Compliance

Steve Roennau Headshot WebPosition increases focus on boosting dealership profitability through compliance

EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today the appointment of Steve Roennau as Vice President of Compliance, reflecting the company’s ongoing mission of driving operational compliance for its retail dealership clients.

Roennau brings a 30-year history of driving bottom-line results in automotive F&I, sales and product management, giving him strategic insight into the compliance hurdles facing both dealers and lenders. His experience includes compliance consulting and training/operational development for Chrysler’s Five Star initiative, Chrysler Capital, Santander Consumer USA, Hyundai, General Motors, Ford, Mitsubishi, Volkswagen, and numerous dealer groups throughout the country. He is an AFIP Senior Certified Professional in Financial Services, and has conducted numerous training courses.

“Today’s dealers are facing a much greater level of compliance oversight, affecting everything from finance margins to advertising practices,” said John Pappanastos, President and CEO of EFG Companies. “Dealers need forward thinking partners who can successfully navigate the myriad of changes on local, state and federal levels. With Steve leading our compliance initiative, we are in a strong position to stay ahead of upcoming changes and proactively prepare our clients. In 2014, EFG’s dealer clients rated compliance as one of EFG’s top three areas of performance. In 2016, we expect Roennau to raise the bar for our clients and the industry.”

“At EFG, we are committed to facilitating the highest levels of operational compliance for our dealer partners,” said Roennau. “Our very progressive work will provide our clients with a sophisticated analysis of their current compliance procedures, and prepare them for upcoming changes that will enhance customer service, compliance alignment and increased profitability.”

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Boost Your New Car Sales Through Leasing

Leasing: Does Your Team See the Light?

Contributing Author: Stephen RoennauLease incentives are around the corner, just in time to take advantage of record lease penetration. Recent vehicle registration data released by Polk stated that new cars accounted for 29 percent of all sales through May, which puts the year on pace to top last year’s rate of 27.6 percent. This is the highest penetration of new cars in the last five years. According to Edmunds, leasing is behind this breakthrough accounting for 25 percent of new cars sold.

At this time, it is vital that your sales team is trained to not only close a sale, but also a lease. The most important question to ask yourself is, “Does my team know how to position leasing vs. a traditional loan?” If you don’t know the answer, then these tips will help refresh your team until you register for EFG’s lease training workshop.

New vehicle sales are outpacing last year’s totals. Why? According to Edmunds, the reason is the surge in leasing, which is on track to smash last year’s record penetration rate of 22%.

Everyone knows that all vehicles depreciate in value as soon as they are driven off the lot. However, few consumers make the connection that their vehicle depreciates at the same rate whether they lease or buy. The only difference lies in what they pay for. Think about what most customers say is their single biggest expense is in owning a vehicle. They either say their monthly payment or gas. The truth is that their single biggest expense may be the hidden cost of depreciation.

Most customers don’t learn about this expense until it’s too late – at trade-in time, when dealerships offer them less than what they expected or needed. Offering them a lease is a great way to manage the depreciation expense and make the trade-in process easy.

When positioning leasing, just as with purchasing, your sales team needs to understand their customers’ needs.
If they have a predictable lifestyle, drive a low average number of miles, properly maintain their car, and want to make trade-in easy, then leasing may be a good option. Top selling points for a lease include:

    • You are protected from market risks that affect the value of your vehicle.
        • Rebates
        • Bad press
      • Discontinued model
    • You may lower your monthly payment without being stuck in a long loan.
  • You get to drive a newer model car with the latest technology and safety features.

Advise your customers that when they buy, they commit to the entire cost of the vehicle – no matter how many miles they drive or how long they keep it.

While leasing is on the rise, there will always be people who prefer to buy. That’s why it’s important to ask the right qualifying questions before positioning a lease, such as:

    • How often would you like to trade in your vehicles?
    • When was the last time you paid off a vehicle and kept it for a while?
    • How many miles do you drive per year?
    • Do you trade your vehicles or sell them outright?
  • When was the last time you were happy with the amount offered for your vehicle at trade-in?

In the end, your sales team needs to help their customers decide what matters to them. The decision to lease or buy depends entirely on their lifestyle and what they feel comfortable with.

With more than 35 years of insight into the consumer mindset in the auto retail space, EFG’s Transcend Group knows how to train your team to readily position the benefits of leasing compared to 3, 4 and 5 year retail loans. They also gain a deeper understanding of how closing a lease benefits them and the dealership.

To take your team members beyond the fundamentals of leasing, register for our Lease Training Workshop today before it’s too late!