WEEKLY F&I REPORT: Watch out for discrimination, deception, F&I Week panel warns | Ally named preferred lender for Mitsubishi | 5 key tips from F&I Week speakers

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WEEKLY REPORT June 27, 2012 Tell a colleague about this newsletter         Contact Us            Watch out for discrimination, deception, F&I Week panel warns When it comes to regulations and F&I, two areas dealerships need to beware of are discrimination and deception, according to panelists at last week's Automotive News F&I Week. In terms of discrimination, the hot topic is what's called disparate impact, said Michael Benoit, a partner with Hudson Cook law firm in Hanover, Md. ...  story  Ally Financial named preferred lender for Mitsubishi Ally Financial has struck a deal with Mitsubishi Motors North America to become a preferred finance provider. Ally has begun providing leasing and financing for the 2012 Mitsubishi i electric minicar at certified dealers nationwide, the companies said in a joint statement today. ...  story  'Don't give up on cash customers,' 4 other tips from F&I experts Integrate F&I with the rest of the dealership. Don't give up on cash or credit union customers. Those are a few of the tips from speakers at last week's Automotive News F&I Week webinar. Replays are available for free at fandiweek.com. ...  story  Honda finance arm is a leasing powerhouse American Honda may be No. 5 in sales in the United States, but its captive finance arm is No. 1 in an increasingly important arena: leasing. In the first quarter, American Honda Finance lease deals accounted for more than 16 percent of all new-vehicle lease transactions industrywide, according to Experian Automotive. ...  story  LEGAL FILE 'Reckless' store loses bid to cut $105,000 award to Spanish-language buyer A former Connecticut dealership that violated the Truth in Lending Act and the state’s unfair trade practices law must pay an arbitration award of more than $105,000 to a customer who spoke no English, a federal judge in New Haven has ruled. >> Story  Instant replays on F&I If you missed the Automotive News F&I Week last week, you can still catch the shows. All six F&I Week Webinars can be replayed at your convenience over the next 12 months. Play them again at fandiweek.com           F&I BY THE NUMBERS Lease terminations drop at VW Credit VW Credit saw fewer scheduled lease terminations recently, reflecting an earlier drop in leasing. That gives dealers fewer off-lease units to sell and fewer off-lease customers as prospects. Outstanding leases in units, at period end. Data includes VW and Audi brands. Period Leases outstanding Scheduled terminations Yr.-ago change Q1 2012 323,429 32,139 -18% 2011 317,655 118,771 15% 2010 321,582 103,199 7% 2009 319,665 96,559 -16% 2008 326,901 115,021 19% Source: VW Credit, SEC filing   JIM HENRY Are dealers misbehaving, or are complaints ancient history?   Jim Henry is a special correspondent for Automotive News Dealers and their advocates acknowledge that there are some problem dealerships. But some industry insiders are convinced there's an element of urban legend in some of the complaints that come up at public forums about payment packing, "yo-yo financing" and the like. Last week Michael Benoit, a Washington, D.C.-area lawyer who represents car dealers, told an Automotive News F&I Week panel that, to his knowledge, one anecdotal complaint against dealers that came up last year at a Federal Trade Commission roundtable discussion has been making the rounds for "more than 30 years." FTC attorney Carole Reynolds responded, "I don't think the problems that we have seen are necessarily 30 years, or something that happened 30 years ago. So I just need to come back on that point." Reynolds, senior attorney, FTC Division of Financial Practices, was another F&I Week panelist. Benoit said, "You're absolutely right, Carole." Nevertheless, the feeling persists among some dealers and their advocates that except for a few rotten apples, some common complaints against dealers are twice-told tales and largely out of date among reputable new-car dealers. The FTC and the new Consumer Financial Protection Bureau have said repeatedly that if and when they make rules for auto lending, they will make decisions based on data, not on anecdotal evidence. Meanwhile, both sides are skeptical. JAMIE LaREAU Selling accessories before F&I -- and profiting on both   Jamie LaReau covers auto dealers for Automotive News Is it possible to sell customers vehicle accessories before they enter the finance and insurance office and still see strong F&I product sales? Yes. In fact, pushing accessories before F&I can boost F&I sales, some dealers say. They say it gets customers excited about their vehicle purchases before they sit down with a finance manager. So customers are often more relaxed and ready to spend money on products to protect their purchase, two dealers recently told me. Take the Ben Mynatt Family of Dealerships, for example. Initially, managers at Mynatt feared that promoting accessories first would cause buyers to blow their budgets on add-ons and have nothing left to buy F&I products, says Tom Zeffiro, executive manager of Mynatt, which sells Chevrolet, Cadillac, Buick and GMC vehicles in Concord, N.C.,and Nissans in Salisbury, N.C. But Zeffiro says that has not been the case. In January, Zeffiro tweaked his sales process to present customers with available accessory items before they enter the F&I office. Customers sit at a computer kiosk where they can use software to buy accessories in the showroom. Accessory sales have risen to $200 per vehicle per month from $80 per vehicle per month, Zeffiro says. And Zeffiro’s F&I sales have jumped by about $250 a vehicle from a year earlier, he says. Fitzgerald Auto Malls have seen similar results, says Larry Branche, Fitzgerald’s corporate manager and director of accessories and aftermarket program, in Kensington, Md. Since Fitzgerald began pitching customers accessories before F&I products five years ago, annual accessory profits have been $1.3 million to $1.4 million a year, up about 25 percent from before Branche put the process in place, he says. Branche uses a soft-sell approach and software that lets customers use the online calculator to figure their payments if they decide to buy an accessory. Once in the F&I office, the finance manager can roll that accessory purchase into the final deal. “We definitely did not want to do anything that would impact our F&I business in a negative way,” Branche says. “But we didn’t have this extra source of revenue from accessories. We were able to capture more of it, without losing other parts of our business.”   Young consumers lead drive to online financing More consumers are submitting their own credit applications online rather than letting a dealership F&I manager do it for them, auto lenders and industry observers say. ...  story  How dealers can win Gen Y buyers' business Young buyers don't trust the F&I process at dealerships, but there are some things savvy dealers and lenders can do to get their business. ...  story  F&I PRESS RELEASES » Mitsubishi Motors Adds Ally Financial as Preferred Finance Provider, Begins Mitsubishi i Lease Program » Standard & Poor's Reaffirms World Omni Financial Corp./CenterOne Financial Services' STRONG Consumer Finance Servicer Ranking » myAutoloan.com Reaches Social Media Milestones with Facebook and Twitter DEALER JOB LISTINGS ADMINISTRATIVE ASSISTANT/SALES - RM - AL: RM SALES Representative/CO-ORDINATOR - RM - Alabama: RM New Vehicle Sales and Finance Manager - Leif Johnson Ford Stores - Austin, TX: Leif Johnson Ford Stores Controller - Pecheles Automotive - Greenville, NC: Pecheles Automotive Chief Financial Officer - Toyota of Orlando - Orlando, FL: Toyota of Orlando   >> Unsubscribe from this newsletter                        Copyright © Automotive News                        Designed by Templatesbox.com Automotive News is located at 1155 Gratiot Ave., Detroit, Michigan, 48207