Saturday, December 27, 2008

A Look Back at 2008

Thank God 2008 is almost over.

There were many good times in 2008.

We had some tough times as well -
(About an hour each day wasted zoning out right here).

May much fortune rain upon the retail automotive
industry in 2009 (Please God).

Maybe we should ask the Blue Genie.

Ah, Time for another glass of good Merlot


Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration
Back in 1929 Financial Crash it was said that some Wall Street Stockbrokers and Bankers jumped from their office windows and committed suicide when confronted with the news of their firms and clients financial ruin. . .

Many people were said to almost feel a little sorry for them . . . . . .

In 2008 the attitude has changed somewhat:

Happy New year!


To measure a "well-run" automotive F&I Department, visit:

Wednesday, December 24, 2008

Turn off the damn TV in the waiting room!

By: Dealers Edge

We are being bombarded with analysis - much of it trying to predict when we will bounce off of the bottom of this painful recession.

Earlier in December we hosted a Web Conference that featured seven of the brightest minds in dealership fixed operations. These seven experts spent 30 minutes each offering their best advice for how to cope with the recession as a service manager. Over 700 locations registered for this event and their post-Webinar comments were almost universally enthusiastic.

In his presentation, one of Ed Kovalchick's recommendations was for you to "Turn off the damn TV in the waiting room."

Ed went on to explain that most often the TV is tuned to a cable news channel and that could only depress your customers even more as they waited for their vehicle to be serviced. Great advice! (He further suggested that you play DVDs of classic movies instead.)

For most news outlets, it's not news, unless it's bad news. I am a "glass half-full" guy and while I like to be well-informed, I am also very skeptical when listening to pundits and other so-called experts as they attempt to predict what the most savvy economist will tell you cannot be predicted.

So it is with that caveat that I offer to you some economic analysis from one of my favorite economists- Brian Westbury is the Chief Economist with First Trust and is often seen on business news shows and quoted in newspapers and magazines. I like him because he is not always so negative and within my limited ability to understand what economists are saying, he makes sense to me.

But that is only my opinion - you make up your own mind. Westbury recently wrote and article entitled, "We Are the Catalyst," exploring the concept of an event or happening that will signal the reversal of the downward spiral the economy appears to be in.

It's an interesting take on the current state of affairs and I invite you to read it for yourself. Westbury's- "We Are the Catalyst" While you are on the First Trust Website, you might want to look at a couple of videos at "Westbury's 101." The first is dated from December 3rd and is entitled "Perspective on Recession."

Link to "Perspective on Recession" (You may have to click on the link by that title once on the page.) The second is from December 12th is titled "Retail Sales Show Bounce in Velocity."

Both short video clips offer some insight into our present down-turn that you are unlikely to here while watching the mainstream news shows. To view "Retail Sales Show Bounce in Velocity"

I know there are plenty of economists that will take the same data and project an opinion 180 degrees from Westbury's. But it is good to know that someone has a bright outlook.

And please take Ed Kovalchick's advice - "Turn off the damn TV" - at least until next Monday.

Merry Christmas to all and to all a good night.

Good Stuff.


To measure a "well-run" automotive F&I Department, visit:

Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Wednesday, December 17, 2008

Backseat Driver - Let's Bail Out GM

A Good Article by Jerry Flint

Let's stop kidding ourselves. If General Motors is going to survive in the U.S., it will need government-guaranteed loans. Just between us capitalists, is there anything wrong with that? In 1980 we guaranteed $1.5 billion of private loans to Chrysler, which was much smaller than GM is today. The government made $400 million on the deal.

We're lending $120 billion to an insurance company. There's $700 billion set aside for banks and others whose leaders enriched themselves while ruining their companies and our economy.

The leaders of GM have made their mistakes--plenty of them--but they didn't enrich themselves beyond decency as those other executives did. Today's economic problems, brought on by subprime mortgages, credit default swaps, a credit freeze and a stock market collapse, were caused by those other folks.

We need to decide if we want a domestically controlled auto industry. We won't run out of cars. Toyota (nyse: TM - news - people ), Honda (nyse: HMC - news - people ), Mercedes and BMW will make sure of that. But the auto industry created the American society we know today. If this industry can't survive, what can?

We might ask ourselves if Japan would allow Toyota to go down in these circumstances or if Germany would let Volkswagen (other-otc: VLKAF.PK - news - people ) fail. We should also ask whether those foreign companies will build the tanks and trucks that we might need someday.

A collapse of GM would bring a huge job loss, close to 100,000 people on its own payroll, plus hundreds of thousands of others in dealerships and supplier industries, heavily concentrated in the Midwest. We'd pay a price for this in unemployment insurance, medical costs, the squeeze on schools because of tax losses and all the things that go with such devastation.

By now I am sure most of you realize the seriousness. GM could be out of money by the middle of next year. GM has successful operations in Europe, Brazil and China, but sacrificing them to save the American business would fail and would destroy chances for a future recovery.

At the same time it was enacting the bailout legislation, Congress approved a separate $25 billion package for the auto companies in Detroit, but that is only for retooling 20-year-old factories, and I doubt if any of that cash will get passed out for another year. GM needs money now to keep the business running until the tide turns.

There is talk of some sort of GM-Chrysler combination. All this would mean, as far as I can see, is that more factories would have to be closed, more workers laid off, more auto dealers be allowed to collapse.

We owe GM some help. The company helped save this country in World War II. GM paid such great wages and benefits that an entire middle class of workers was created. And it built some great cars.

Maybe you're driving your Mercedes to work and you're thinking: "What has GM done for me lately? We're not a manufacturing economy anymore. We're technology, service, finance. Let those autoworkers, who make too much money anyway, get jobs at Wal-Mart (nyse: WMT - news - people )." But when GM gets killed, it's bad for business everywhere, and we're supposed to do something about it.

Taxpayers should get stock warrants so they win if GM turns around. There should be some sacrifice by the workers whose jobs we would be saving. (Workers gave up $1 an hour in the Chrysler deal.) We should make sure that loan guarantee money does not get moved into union funds, such as the one that GM has promised the UAW in return for taking over health care costs.

The biggest question is the management and board of directors. This company has been sinking for decades, losing market share year after year, building cars that didn't match those of foreign competitors--who build them here, too, by the way. I would demand a new board of directors for sure, including some people who know something about the automobile business.

GM has finally woken up, at least as far as the vehicles go. The new cars and trucks coming off the lines are among the best. But this management doesn't inspire anyone. It will take a great leader to bring GM back to prosperity, the way Lee Iacocca saved Chrysler and, a few decades before that, George Romney saved American Motors.

Now, you may find even this small dose of socialism to be intolerable. You may think taxpayers have no responsibility to save private companies. But General Motors (nyse: GM - news - people ) needs help if it is going to survive in the U.S. It's about time that GM executives admit this and ask for that help. What's good for America is good for General Motors--and vice versa.

Jerry Flint, a former Forbes Senior Editor, has covered the automobile industry since 1958. Visit his homepage at

Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Monday, November 24, 2008

10.5 Hints to Help You Get a Car Loan

By Geoff Cohen

AFI - This is a good article that I found on Ezine

1.Know your credit score.

Get a copy of your credit report. Review it for errors and make any corrections before you try and get a loan. If there are major errors in your credit report, consider delaying your application until the corrections are completed. This will make sure you keep the car dealers honest. If you desperately need transportation, try renting a car short term until your credit report is straightened out. You may actually save money on fuel, insurance and repairs by renting which you can add to your down payment.

2.Have an explanation for your credit issues.

Dont be apologetic. Bad things happen to good people. Be specific about any problems or crisis that caused your problem. Let the bank know about any major upheaval in your life that may have led to your problems such as an illness or a natural disaster, like Katrina, or 9-11.Make sure that you can substantiate your claim.

3.Dont lie about anything on the credit app.

Lenders will turn reject your loan if they find you lied to them.

4.Know your income.

Make sure you can prove what you make. Have your proof readily available.

5.Save your down payment.

More down means more car. Larger down payments can sometimes get a lender to view your application more favorably.

6.Know what the payoff on your trade-in is.

If you are trading in a car with a payoff, get a ten day payoff from the lender. If you have a warranty or additional policies bought with the vehicle, find out if you can cancel them. This will lower your payoff or entitle you to a refund after the vehicle is paid off.

7.Know what your car is worth.

Check out NADA or KBB first. Go to CarMax and see what they will buy it for (provided they stay in business). Use these figures to negotiate the best trade in value. Remember, If you get more than the payoff, that amount becomes down payment.

8.Buy what you need, not what you want.

Set realistic expectations. Dont buy more payment than you can truly afford. Rebuild your credit first, than rebuild your image later.

9.Dont be argumentative.

Nice people get better deals than people who give sales reps a hard time. (Very true)!!!

10.Try other sources to get a loan.

Check online. Lenders such as Capital One, HSBC, Roadloans, and CitiFinancial all have websites which let you apply direct to them for a loan. You may get better rates and terms from lenders online than from a dealer.

Check your credit union or insurance co. They may have a loan program or lender relationship. A good payment history with your insurance company may help you get a loan from their bank. Credit unions can sometimes do automatic payroll deductions, which gives them re-assurance that you will pay the loan, so they might be more receptive.

(AFI's COMMENT - I do this myself, but remember, the f&i manager at least get's a loan origination fee to do the financing at the dealership. To respect the f&i manager, have your financing arranged, but allow them the opportunity to match the interest rate. It should make no difference which finance source you use, and it might make your delivery experience more pleasant as the f&i manager will know that he/she is at least making a little money on the deal. Believe me, there is nothing worse for an F&I Managers attitude sometimes, than having to deliver another "cash deal").

10.5 Dont go from dealer to dealer.

Excessive inquiries can be a reason a lender declines your application.

Geoff Cohen is a seasoned auto professional, with over 30 years experience. He has done it all, from sales rep to F&I Manager, New Car Manager, Used Vehicle Manager, up to GSM and GM. He has also worked as an area sales manager for a major sub-prime lender as well as run his own BHPH and Auto Leasing/Brokerage company.. He is the National Accounts Manager for AutoLending Network and is a contributing author to, a blog about Special Finance solutions for auto dealers as well as F&I Magazine and World of Special Finance Magazine

Article Source:


Friday, November 14, 2008

Cold Calls

This is is an awesome re-print from a fantastic blog titled Confessions of a Car Man. It is written by David Teves, a veteran of the car business and its self-proclaimed "designated bitcher". Check out his website at

Cold Calls

I believe it’s a universal truth that all car salesmen hate making cold phone calls. It’s one of the great sources of animosity between salesmen and management. Handing out cold call sheets make the managers feel like their doing something proactive. Whether the calls actually work or not is not the point. In my humble opinion it’s mostly just a sadistic power trip.

I have no idea if the practice of cold calls is still prominent in this great country of ours (and I include my friends in Canada here, too). I hope it’s a thing of the past, but I suspect it isn’t.

Let me tell you a story. When I first started selling cars the salesmen in all the dealerships in the East Bay were unionized. (The now defunct Salesmen Local 1095, may it rest in peace.) Apprentice salesmen were not allowed to take an up for the first 30 days of their employment. This rule was strictly enforced. For that first month, I was put under the tutelage of a couple of journeyman salesmen whose job was to show me as they say, “How the cow eats the cabbage”. One of the things they had me do was make cold calls.

In the sales meeting room of Hayward Ford there was a telephone hooked up to a speakerphone. Each day I was taken to that room by one of the salesmen, sat down at the desk, given a script and was forced to make a few cold calls. The older salesman would listen on the speaker and critique me when I was finished.

Let me give you an analogy. When I was a kid I was raised in the Catholic faith. Nothing terrorized me more than going to confession. Here I was, sitting in pitch-black booth talking to the personal representative of God. It scared the living shit out of me. Making those cold calls made me feel the same way.

The irony of it all is that these leads came directly out of the phone book! Here I was calling people at random, in the vain hope that might just happen upon a person who needed a car. Talk about a needle in a haystack! What the hell was the reasoning behind this? At the time I hadn’t a clue. I felt it was some sort of weird Car Man initiation essentially designed to torment me.

My brother, Danny hated to see salesmen standing around doing nothing. (He didn’t understand that standing around doing nothing is one of our God-given rights!) I remember him getting pissed off, taking a telephone book, ripping out a few pages, and handing them out to equally pissed-off salesmen. I love my brother more than anything, but not when he had that phone book in his hands!

For the first five years of selling cars cold calls, or calls to orphan owners (which I’ll admit made a little more sense) was part of my automotive life. It would have been okay if making these calls worked, but I don’t think I ever sold a car off a cold lead. I hated making the calls, but I was always threatened that a manager would check my phone sheets to make sure I had really called the potential customer. For me, it was a demoralizing and depressing situation.

Then something life-changing happened to me.

I first met Tony Taylor when I worked at Elmhurst Ford in Oakland. Tony was a really great, funny guy and a consummate Car Man. He also had the best hairpiece I have ever seen in my life. Tony seemed to take a liking to me and was always giving me advice about selling cars.

A couple of years after I met him we were working together on the used car lot at CST Ford, a mid-70’s incarnation of Hayward Ford. I had been in the business for five years or so. I was a so-so salesman who never seemed to make a lot of money. I struggled each month just to make a living.

One day Tony came into my office. He closed the door and sat down across from me, and crossed his arms.

“What are you doing?” he asked me.

“Just making my phone calls, Tony,” I replied.

“Cold calls, huh?”

I nodded yes.

“Let me see all your call sheets,” he said. It was not a request. It was a demand.

I handed Tony a stack of sheets. He shuffled through them for a moment, looked up at me--and he tore them all in half.

“You’re done with that,” he said. And then he explained the secret to success in the car business. It was simple and to the point.

“Wait on customers,” he said. “Follow-up on them. Ask them for referrals. Those are the people you want call. No one else.”

“But they make me!” I protested.

“Lie,” he said simply. “Everyone else does it. Why not you?”

“But what if they check?”

Tony laughed. “David, do you really think the managers are going to check your cold calls? Do you think they have the time? Do you think when they were salesmen they made these calls? I tell you, son, it’s all just one gigantic stroke.”

In a blinding light of revelation I knew that Tony was speaking the truth. I took his advice, and I soon discovered that when I concentrated on the people I had actually talked to, I immediately started making more money. Great story, huh?

But hey! What’s that I hear? Could it be the sound of cold call sheets being ripped up?

Music to my ears.

Talk to you later,



Saturday, November 8, 2008

Making Presentations Non-Threatening

By David Lewis

Ask your business manager if he or she knows this feeling. They're making a service contract presentation and can just feel and sense the customer squirming. It is very uncomfortable for both them and the customer. The customer doesn't want to be ignorant and stop them, and your business manager still has to make the presentation, all along having a defeated attitude.

This is not the best situation for success selling any F&I products. Check your F&I department's service program and insurance penetrations. Chances are, the percentages of non-penetration are directly from this circumstance.

This can be changed and all it takes is some examination of the question, "Why?" Why are customers uncomfortable listening to a presentation of a product that they don't even know anything about and that may be extremely beneficial to them?

If we understand the psychology of customers' defense mechanisms and their perceptions of what they can expect when put into most selling situations, we can then better understand why they are uncomfortable and how to reduce seller/buyer tensions.

Let's examine the "whys." First, what is a customer's perception of what your business manager really is? The customer perceives them as a salesperson and a salesperson is someone who tries to sell you something for profit.

What is a customer's perception of what a salesperson will do to make a sale for profit? The answer is anything, especially pressure. Why? Because it is in the Salesperson's best financial interest if the customer buys (regardless if it is something good for the customer or not), and a waste of the Salesperson's time if the customer does not.

If you can truly say your F&I Manager is a trained professional, then none of the above customer perceptions should apply to him or her, and they need to let the customer know it! This will allow them to relax and be more receptive to the presentation, which is crucial to getting good objections.

Professional salespeople do not need to use pressure. They believe, and are correct, in feeling they are offering a valuable product or service. They are prepared to respond and do respond to customers' questions and objections logically and intelligently so the customer has all the right information before being expected to make a decision.

Also, they know that regardless of the value of their product or service it will not be for everyone. They know that making a certain number of presentations is required in order to make a certain number of sales. Consequently, professional salespeople are not frustrated about spending a sufficient amount of time with a customer without making the sale, therefore do not show frustration to the customer.

How does your business manager let the customer know they are unique, different and more professional than any other dealership personnel they've encountered? We have found there are two very simple ways for this to be accomplished.

First, we want the customer to feel that we are letting them know what is available to them, what are the features, advantages and benefits, and what it will cost, because they deserve to know. Secondly, when we address their issues (objections) we are only providing them with all the information they should have before making a decision, whether to buy (enroll) or not to buy (enroll), because they deserve to know this also. Note: I prefer to use psychological verbiage, i.e., I believe customers would much rather "enroll in a service program" than "buy an extended warranty."

So how do we get this across to the customer. It's simple. Just say it.

If your business manager senses the customer is feeling uncomfortable or threatened during any of your presentations, simply have them say, "Mr. Jones, Mrs. Jones, by the way the reason I am presenting this program to you is because Mr. Lewis, the dealer, insists that every customer knows what is available to them, what it will and won't do for them, and the cost. He feels you deserve to know, then make your decision as to its benefit or lack of benefit to you."

A tremendously unique way to get this concept to the forefront is something I recommend every business manager do, which many of my clients have done with great success, and that is have a small engraved plaque on their desk that says, "OUR CUSTOMERS DESERVE TO KNOW!," and below that your signature engraved.

When your business manager tells the customer you insist that every customer be told what is available to them, what it will provide, etc., as suggested above, they then can point to the plaque and reinforce their statement. But, most of the time the customer will ask, "what does that mean, the customer deserves to know what?" This is perfect, as your business manager will be able to use the verbiage even before he or she begins their presentation.

Obviously, even if the customer has some interest after the presentation, they will have objections (requests for more information), and your business manager should be prepared to respond to their objections and counter their negative thoughts with positive thoughts. This is not pressure, it is logical and intelligent persistence, which the customer also deserves. If the responses to their negative thought processes (objections) are in fact logical and intelligent, then you are doing nothing more than providing the customer with more information to digest before making their decision, whether to enroll or not to enroll.

Tell the customer this, and it should take away their resistance. The selling process will then become more like a non-confrontational discussion and be perceived by the customer as a comfortable process that has their best interest in mind.

Remember, no customer likes to be sold anything. They would much prefer to make a decision to purchase. Create that comfort level with the customer and develop that bond and trust by taking away that feeling of personal gain, and making it one of mutual respect.

Good Stuff.


To measure a "well-run" automotive F&I Department, visit:

Menu "Closing" ... Not Menu "Selling"

by Ron Martin

My preferred approach to selling F&I is want I call the Hybrid Menu Method. It is a process of menu closing, rather than menu selling. The difference is that menu closing is a planned presentation of selling the features and benefits of F&I products and using the menu as a way to get customers to decide on the products they want to buy. It utilizes the advantages of menu selling: An organized selling approach and an alternative close (would you like a, b, c or d?), and recognizes the weaknesses (trying to get the customer to focus on the presentation and not the payments). This menu closing technique was derived from other F&I selling approaches, including step selling, assumptive selling and traditional menu selling.

The Hybrid Menu Closing Method:

The first step toward customer satisfaction and high F&I profits is preparation. This begins prior to the customer walking into the finance office. The F&I professional should have the deal completely loaded into the computer and all necessary forms pulled. You need to set yourself up for success, and not limit yourself by deciding, even if it’s subconsciously, which products you are likely to sell. Your expectation needs to be that you are going to sell all the products.

Once you are completely prepared, which includes making sure your office is organized and professional looking, it’s time to get the customer. Yes, go out and get customers even if it means walking to the used-vehicle building across the lot. This gives you a chance to establish a little rapport while you are escorting them to your office. It also ensures that customers aren’t brought to you until you are ready for them.

When the customers are settled in your office, begin like this:

Mr. and Mrs. Doyle, I’m sure you want to get on with your day with your new automobile, so I’m going to make sure I get your legal documents completed as efficiently as possible. I have your information completely loaded into the computer and all the necessary documents here for your review, but before we sign the paperwork, I’d like to take a couple quick minutes of your time to thank you for your business. My dealer actually requires I do it. We understand you had a choice about where to purchase your vehicle and we are glad you chose us. What is most important to us is that you’ll chose us the next time you need an automobile, that you will be able to send your family and friends here, that you use our award-winning service department and our body shop and parts department. We want to be your choice for all your automotive needs.

We have found that whether any of this happens is partly a result of how happy you are with your automobile, but mostly it is a result of how you were treated during the sales process. My part of the process is the financial process. When you leave here I would like you to be able to say that I was prompt, efficient and straightforward, but most importantly, that I have described the financial benefit packages that are available to you. And, I would like to take a couple minutes of your time to review those two benefits.

At this point, I will normally lead with the service contract.

I’d like to begin by asking you a question, Mr. and Mrs. Doyle. How would you like to prevent having to pay most future repair bills for the next five years?

This question is meant to break preoccupation and get the customer to think or say, “Why must I listen to you?”

I then proceed with a planned presentation where I give customers some information, ask a question and then listen to their response. This will eventually lead to a closing question designed to get customers to make a decision.

Mr. and Mrs. Doyle, there are two ways you can pay for this: You could pay $1,695 cash or you can include it in your monthly payments which would be $29 per month additional, plus your interest charges, whichever you prefer.

Then I wait for a response. The customer will answer in one of three ways:

1. Give you an objection or say no to your response. You should handle that objection and re-close.
2. Say yes to your offer.
3. Ask the magic question: “What does that make my payment?”

Your response should be:

Good question. I’ll get to that in just a minute. Let me briefly describe the other benefit and then I will break out your options to the penny.
Remember, they already know the payment, which they received on the sales floor.

The other benefit package available to you is the loan protection package. It includes: life insurance, accident and health insurance options.

You will then describe the features and benefits of these options. Once you have finished this description, it’s time to menu close.

Mr. and Mrs. Doyle, here is a list of payment options to help you make your decision.

This is the first point that customers view the choices for their decision and pick from the menu. Once they have made an informed decision, you can step sell them to another product choice.

This way of presenting the menu gives you the best assurance that customers have listened to all product presentations before they choose their options. It gives the F&I manager a comfortable approach to aggressive selling, by limiting the bumping that step selling creates. The approach of, “I have one more thing to talk to you about,” wears out the F&I manager and customers.

Give Products the Win-Win Test

If you’re going to add another product, make sure it first passes the win-win test. If it’s a win for the dealership and the customer, then arrange it within your benefit packages. For example, a maintenance and appearance package can be presented on a lease.

The appearance package also sells very well in a two-step process at point of sale. Incorporate it by transitioning it with the we-owe (or due bill).

Mr. and Mrs. Doyle, it shows here that we will have the vehicle filled with gas and cleaned up prior to delivery. It doesn’t show that you took advantage of the 20-percent discount that you can get if you purchase the appearance package right here at the dealership. Did the salesperson happen to mention that? How would you like to keep your automobile looking new and also help maintain its value?

This transition leads you right into your presentation without the customer feeling any pressure.

Choosing the Best Menu

Many dealers tell me, “We need to menu sell in the F&I department.” When I ask them why, they almost always respond the same way: “I want to be compliant.”

I agree that they should use a menu, but it isn’t necessary to be compliant. You can’t be any more compliant as long as the retail installment contracts and lease agreements follow Regulation Z, Truth in Lending and Regulation M, Truth in Leasing requirements, respectively. A menu can reinforce compliance if used properly, but can promote payment packing if it’s not.

Is profit and compliance better served with an electronic or handwritten menu? If I were a dealer, I would definitely invest in an electronic menu. It reinforces compliance and gives F&I managers the flexibility they need to maximize profits. Why? F&I sales are subject to change when the customer arrives and during the presentation. The options you offer a customer, using menu closing, will vary depending on the customer’s responses to the features and benefits presentation. For example, if customers don’t want the service contract after you have handled their objections, you would be better served adjusting the options you are showing them. You might offer them 30-day retro and 14-day retro accident and health options to choose from.

The flexibility of an electronic menu allows you to change options on the fly, while a handwritten menu doesn’t. The electronic menu also gives the F&I professional the ability to create a new menu when customers change the amount of their down payment at the time of delivery.

From a compliance perspective, a handwritten menu can expose a dealer to payment packing. This happens when F&I managers give themselves a cushion on the base payment to make it look like the products don’t cost as much as they actually do. An electronic menu eliminates this from happening, since the software always determines the exact base payment.

(This is from 2006, and I still use this presentation today).

To measure a "well-run" automotive F&I Department, visit:

Wednesday, September 24, 2008

Customer With a Car Fetish

Our dealership has a very good repeat customer who has a car fetish. Every 4-6 months he gets tired of his current vehicle and wants a different one. Getting a new vehicle twice a year has been going on his whole life by looking at his credit report (29 auto loans – all classified individual loans).

I’ve seen him in fast vehicles such as a Ford Mustang Shelby, Pontiac GTO, Dodge Ram SS/T. Lately he took advantage of some Toyota specials on the Tundra and got a loaded extended cab 4X4. Due to its gas mileage, he traded that on an Infiniti G37 coupe.

Each time he finances the vehicle at the MAX advance for 72-84 months while rolling in a staggering amount of negative equity.

Usually, to get a deal done, the dealership has to take a mini-deal and ALL of my negotiation skills with the banks just to help this guy with his impulse purchases and roll a car – because of his negative equity.

Sometimes we couldn’t trade him out with $23,000 of negative. He would go home, think about his decision for a month or two, and come back with a few thousand down at always the right time of the month for us to give a car away.

The funny thing is that he understood the meaning of and always purchased GAP on each vehicle. He won’t be sorry if he ever has to use the benefits.

Obviously, with each new vehicle purchased from my dealership, I would have to cancel the GAP policy from the previous vehicle.

After doing some math, this customer is single-handedly responsible for about 15% of the total GAP cancellations processed in the 4.5 years I have been in F&I at my present dealership.

True Story (He just left the dealership).

Thursday, September 18, 2008

F&I Numbers

This is a column re-printed by permission from Motorcycle Product News. It is interesting to see the actual F&I numbers published. I wonder about the product sales process in the F&I department of a mortorcycle dealership verses automotive.

Life and Disability insurance probably sells well, though I could really see a strong presentation blowing the whole deal - just use the old "put your eye out close". Yes, a motorcycle scares me to death. Give me a big safe SUV!

By Steve Jones
Link to original article:

At GSA we track benchmarks through our involvement with dealer groups such as the Best Operators Club. Some of the members have kindly consented to let us share their numbers from our real-time, web-based data reporting system.

In this column we're going to review the July F&I numbers for one of our member dealers and the related TBOC averages. In 2007, this dealer sold 800 motorcycles, ATV and UTV units, plus 140 trailers and 39 boats. The dealership is located in a town of 22,000 on the outskirts of a city of 180,000 people.

In Chart 1 we see that they have only one F&I person. For July, they captured 90 percent of the financed deals. They had an approval rate of 52 percent. Tracking and following up on "approved but did not buy" deals is also very important. Did they buy elsewhere? Why? What could you have done to get these deals?

Chart 1

CY: current year
PVS: per vehicle sold
TBOC: average of the top five BOC members in this category

In Chart 2 you can see that their overall July finance penetration was just under 60 percent. This is short of the benchmark of 70 percent, but not bad. If you don't get the financing, it is very hard to maximize add-on sales of F&I and P&A products.

Last year at this time, this dealer was averaging just over $300 PVS in F&I GP. This year he has jumped to over $600 PVS! How did he accomplish this? According to the dealer, there were two main reasons: They hired a former auto F&I person who was tired of the long hours and pressure. The five-day week in this powersports dealership was just what he was looking for.(It should be noted that there are quite a few good people leaving the auto business — sales mangers and salespeople as well as F&I managers. This is a good time to take advantage of their current business situation.) They implemented a structured selling process with the correct turnover to the business (F&I) office. They also utilized a four-square worksheet process, and always asked for a down payment amount. This can often be converted to F&I products sales if customers are approved for little or no down payment.

Chart 2

Note: Our data reporting and analysis system is available for any dealership to use for a nominal fee. If you want more info on the Voyager IV data reporting system or BOC, please e-mail or visit our website at In the trend analysis in Chart 3, you can clearly see what happened when they hired the right person for the F&I position and implemented the correct processes. In a very short time they were able to nearly double their F&I income.

"If you do not enforce the sales process, the four-square and the consistent turnover to F&I, it is very difficult to achieve big numbers in the business office," notes the dealer. Obviously, having a fully trained and experienced F&I person is also crucial to maximizing your F&I potential. In today's highly-competitive market, it is essential to have an effective F&I department to pick up the margins.

Chart 3

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Friday, September 12, 2008


This definitely wins the grand prize for the best looking paystub I've seen:

You gotta wonder why some people have bad credit.

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Thursday, September 11, 2008

Capital One survey: Americans don't know loan rates

A majority (61 percent) of Americans who currently have auto loans do not know the interest rate they are paying on their loan, a new survey from Capital One Financial Corporation suggests. In a challenging economy, when saving money is particularly important, many consumers may be paying more than necessary and could benefit from a lower interest rate and a lower monthly loan payment by refinancing, the company notes.

Read the rest of the article here

Are you kidding me???

Where is Capital One getting the data for this survey?

I get beat up all the time over the interest rates. The majority of my customers want to know exactly what the rates are before any products are even mentioned.

Does this article suggest that if the customer falls into the sub-prime catagory, the F&I manager might not be practicing proper disclosure? By reading this article, it appears so 61% of the time - right?

Would Capital One be admitting that they are buying paper from automotive dealerships who are not properly disclosing what their customers are signing.

Having a 61% portfolio ratio of customers who have no idea what their interest rate is would scare me to death.

This creates visions of an F&I Manager putting one hand over the truith-in-lending disclosures while pointing toward the bottom of the r.i.s.c. leading the customer to just "sign right here".

Are we back to the "good 'ol days"?


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Thursday, August 21, 2008

No More Evil Car Dealerships

By: Robert Linkonis Sr.

Each time I read an article warning us about an evil car dealership taking advantage of some helpless customer, I find myself thinking about the other side of the story and ask: “what would your car buying experience be like if there were no more independent franchised new-car dealerships?’”

Sorry to interrupt the cheering, but think about this for a moment: If there were no independent dealerships competing with each other in our free-enterprise economic system, the consumer purchasing their new vehicle would be required to pay the full window sticker price from a manufacturer-owned “outlet store”. Do you think the price would be lower?

One might protest: “Of course it would be lower. We would be cutting out the middleman. Without an evil car dealership sucking up all the profits, the manufacturer could pass that savings on to us the consumers.”

Really? The only true way to cut out the middleman by this theory is to commute to the assembly plant in Detroit or whichever state (or country) the model you wish to purchase is built. Once your vehicle is tested and ready for delivery (which might be days or weeks after you were told it would be ready). You would pay with cash and drive your new vehicle home to do your own DMV work - before the temporary transport license plates expire of course.

Do you have a vehicle you need to trade? Well the factory has no interest in helping you with that one. They are in the business of assembling and selling NEW vehicles. What are they going to do with your old worn-out piece? Do you still owe money on it? Uh-oh. If the “outlet” has no interest in taking your old vehicle on trade, why should they care about helping you with potential negative equity? Nope, with the trade-in, you’re on your own. Good luck trying to sell it. It’s not that hard (really it’s not).

It is assumed that you have better things to do than changing your vehicles oil or doing other regular maintenance and would prefer to have it done for you. Until a convenient network of (probably independent) service centers was established, you would have to take it back to the assembly plant where you bought it.

You might think that to be ridiculous, “there are service stations everywhere” you respond. Yes, but do you really think the guy at the Exxon station is completely knowledgeable about how to fix the technology and many complicated electronics in today’s brand-new vehicles?

Technicians at dealerships now are pressed enough to stay on top of service bulletins for just one brand much less every one out there. Do you want your car “practiced on” by a jack of all trades?

The furious public would demand that the manufacturer set up sales and service centers close to where they live and work to make buying and servicing their vehicles more convenient. Should these outlets operate as non-profit entities or at a loss just to give you a convenient place to purchase and service your new vehicle?

I think not. The factory would expect these outlets to be profitable, as would the owners of any retail outlet. Instead of an independent franchise, the “middle man” would then become a manufacturer-owned outlet store. Operations of these sales and service centers would then be conducted in one of two ways:

1) Similar to the independent franchised dealer with the freedom to adjust retail prices of sales and service to compete in the marketplace. Pay plans for all staff would be based on net-profit. This competitive environment allows informed consumers to get better service and a much better deal.

2) Or it could be like Ford's failed experiment in trying to operate factory-owned dealerships 10 yrs ago. In keeping sale prices identical at each one of their outlets, it was assumed that more profit would be made through price-fixing.

There were numerous reasons why Ford's experiment failed. Mainly it was because there were other choices out there. Ford found out that there are many dynamics, in addition to the huge overhead involved in operating a dealership. Ford also recognized that the outlets had to be profitable (sounds like any car dealership doesn't it?).

We need to support the local dealers and ethical f&i managers that want to do business the right way. They are the vast majority. Let them make a profit. The alternative is manufacturer-controlled outlets where you are guaranteed the privilege to PAY HIGHER PRICES when buying and servicing your vehicle.

Good Stuff.


To measure a "well-run" automotive F&I Department, visit:

Thursday, August 7, 2008

Paying the Phone Bill

I am VERY bored today. Maybe I'll draw up a bank contract with numbers looking like this check and send it in to funding...

Ah, too much work.

More Redneck Pics

August started out strong and just fizzled yesterday. I still don't feel momentum. Oh well. Let's enjoy some more redneck pics.

Redneck Stonehenge

Redneck Mansion

Redneck Limo

Redneck Car Lot
Check out more redneck pics HERE

Tuesday, July 29, 2008

Things that creep me out:

View from the International Space Station
on 9-11.

The last picture on a digital camera found in
Sri Lanka after the tsunami.

Why won't he put his hand over his heart
during the Pledge of Allegiance?

Could it happen again?

Pretty deep for an F&I Manager huh.

- Let's all have a strong finish in July!


Thursday, July 24, 2008

The Murder of a Car Salesman

The car business is slow everywhere but Damn...

Dealerships charged with stealing identities to help drug dealers and gang members buy expensive cars:

Victory Toyota and a used car operation on Long Island implicated in multipronged investigation all started by the murder of a car salesman at Universal Auto World

The investigation got its start in January of 2007 when salesman Colin Thomas was found shot in the back outside of Universal in Lawrence, New York

As the local police investigated the murder, they started pulling on threads of evidence that ultimately uncovered a large-scale scheme of fraudulent financial dealings, identity theft for the purpose of hiding the true identity of the purchasers of high-end vehicles, the use of “straw buyers” for the same purpose, and ultimately the padding of car purchase finance agreements to cover unordered and unwanted extended warranties and anti-theft equipment.

Most of the allegations appear to be directed in or through Universal Auto World according to the account in the Long Island newspaper Newsday. And while the article does not fully explain if any official business relationship exists between Victory and Universal, apparently in the process of investigating the murder, identity theft and use of straw buyers at Universal, authorities also discovered alleged improper sales tactics being employed at Victory Toyota.

It all got started in January of 2007 when the body of Colin Thomas was found dead of an apparent gun shot to the back outside of Universal Auto World - a used car business in close proximity to Victory Toyota.

The investigators reportedly discovered elaborate schemes to use stolen identities to mask the true identity of the purchasers of high-end vehicles. Four instances of stolen identities were reported, including one 75-year-old local woman. Her I.D. was used to purchase over $250K worth of vehicles including a Maserati valued at $100K. The stolen I.D.s were used to complete the sale of the vehicles to “known” drug dealers and other criminals, according to another account in the New York Daily News. Those with criminal reputations seek ways to stay below the radar of local law enforcement. Owning their vehicles in the names of others is one way to achieve this result.

Police also uncovered the use of “straw buyers.” In these cases, individuals were paid to allow their names to be used on the purchase and vehicle title and registration documents.

Other than being located close by, there was no link indicated between Universal and Victory Toyota. However, in the list of offenses uncovered by their investigation, police included charges that some employees of Victory Toyota had used illegal practices to pad car buyer’s orders with extended warranties and anti-theft systems. Dennis Cirillo, the operations manager of Victory Toyota, and brother of the owner, said that the dealership along with their customers were all victims of the three dealership employees arrested.

The three Victory Toyota employees were charged with 25 instances of filing false financial information, adjusting loan rates, stealing of cash deposits or the adding of unordered aftermarket items was used to inflate commissions.

The dealership is working with the car buyers to either buy back the vehicles or have their finance agreements adjusted to the proper amounts.

Reminds me of the movie Fargo.


Thursday, July 17, 2008

F&I Acronyms

A friend of mine, David Teves posted on his blog "Confessions of a Car Man" an acronym for the F&I manager: Fool & Incompetent. I love it. It got me thinking about other F&I acronyms:

F***in Idiotic

Foolhardy & Inefficient

Failure & Incapable

Foolish & Inadequate

Fruitless & Imbecilic

Futile & Inappropriate

Fine & Intelligent?

Hey, If you can't laugh at yourself, it's a personal problem.

I just delivered three deals that got my month back on track - About damn time. This month might actually turn out decent after all. Good luck to all in the car business trying to pull out what should turn out to be a good July.


Thursday, July 3, 2008

Ex-prison worker employee comes in handy as a customer vents his showroom rage with a knife attack

You can't make this stuff up...

Battlefield Ford (an appropriate name for this story) was the scene of a knife attack on a 38-year dealership employee.

According to a story carried by WCAV-TV a CBS affiliate in Charlottesville Virginia, Sixty-six-year-old James Jackson came to Battlefield Ford on Wednesday morning to complain about a vehicle he recently purchased at the dealership.

There was no indication in the written account on what lit his fuse, but during his confrontation with Butch, a 38-year employee of the dealership, Jackson produced a butcher knife and proceeded to attack him.

According to the report, Jackson was able to cut Butch several times before another dealership employee, Fred Nelson, was able to intervene and take Jackson to the floor.

According to another dealership employee, Nelson used to work at the prison and apparently was familiar with the techniques for disarming and neutralizing an angry armed man. The report indicates that once Nelson became involved, Jackson was quickly taken to the floor and pinned.

Jackson was arrested and charged with malicious wounding and is being held in jail pending a bail hearing.

No one else was wounded, but several were taken to the hospital to be cleaned up. Apparently it was a bloody scene.

(I was thinking about how the f&i manager might have contributed to this situation - you never know who will come back with a butcher knife - scary).

Another take on the story:

Buyer’s remorse: Dissatisfied car buyer returns to dealership and stabs salesman

The salesman and the customer, a retired dealership employee, knew each other. Quick action by another employee prevented things from getting worse.

DealersEdge Daily Headlines

Police in Virginia say that an angry customer stabbed a salesman at Battlefield Ford near Manassas, Virginia, reports WCAV-TV.

The customer was subsequently identified as a retired employee of the dealership. He was arrested for malicious wounding. Police say he came to the dealership to complain about a car he bought recently.

The salesman was sitting in his office when the attacker entered. The attacker “brought a bag and said, ‘Here, I’ve got something for you,” then pulled a knife and started slashing the salesman.

The incident is a good reminder for dealerships to have an emergency plan in place.


Tuesday, June 10, 2008

Car dealer’s son, another employee arrested in massive drug-smuggling ring

This one has it all: Drugs, money and even the Hell’s Angels

The son of a Canadian Hyundai dealer and another dealership manager were arrested in Washington State following a three-year investigation into their distribution of marijuana and cocaine, according to a report in the Vancouver Province.

Devron Quast, Robert Shannon and seven others were indicted for conspiracy to distribute cocaine and marijuana.

The arrest took place when Messrs’ Quast and Shannon met with an undercover police officer for a drug deal, according to the indictment. The same day, law enforcement officers seized $50,000 and hundreds of pounds of marijuana that the ring was trying to get across the border into the U.S.

Devron Quast is reportedly the general manager of Quast Hyundai and the son of the dealership’s owner. Robert Shannon is a sales manager at the store.

The investigation resulted in the seizure of more than 590 kilograms of cocaine, more than 3,000 kilos of marijuana and about $3.5 million in cash.

According to the indictment, Mr. Quast oversaw the day-to-day drug transportation and provided insurance to Canadian marijuana suppliers. He agreed to pay suppliers $425 per pound of marijuana if a load was lost for any reason.

Mr. Shannon was in charge of distributing the drugs on behalf of the Hell’s Angels motorcycle gang and others.

The narcotics were smuggled across the border in hollowed-out logs on trucks, fake walls of cargo containers and vehicles, within loads of commercial lumber, inside PVC pipes and in the interior of a propane tanker.

Link to source article:

Monday, May 5, 2008

Virginia Chrysler dealer turns detective to catch tire thief

This is a good story. It shows how CCTV cameras combined with some persistence can help catch and deter thieves:

David Julien got an early morning call from one of his employees informing him that four tires and high-end rims worth a total of $9,000 had been stolen overnight from two Jeep Cherokee SRTs on Mr. Julien’s dealership lot, according to a report in the Virginia Gazette.

(Must be REALLY slow in Williamsburg)

After reporting the crime to police, curiosity prompted Mr. Julien, who owns Williamsburg Chrysler Jeep Kia in Virginia, to review the clues himself. Video from his company surveillance camera revealed that a white Jeep Cherokee had pulled onto the lot during the timeframe of the theft. It pulled out less than an hour later.

Mr. Julien figured the purloined tires would be easy to spot. “There’s only three of those Cherokee SRTs in the Williamsburg area,” he recalled. They run $47,000. “One of them belongs to someone in town. The other two are on my lot.”

He started to think about similar vehicles he had seen pull up lately. It occurred to him that a fellow who came in to look at an SRT drove an older white Jeep Cherokee. Mr. Julien rode by the man’s office, knowing that he usually parked out front. But the Jeep wasn’t there.

A few days later, he rode by again, and this time drove around back of the building. There was the white Cherokee, with all four stolen tires.

Mr. Julien contacted police. “I told them I had found the tires, and I knew who took them,” he said.

The suspect told investigators that he purchased the tires and rims from a man he met at a gas station. Two days later he was arrested and charged with one count of grand larceny.

Back at the dealership, the CCTV surveillance system was the hero. “On one other occasion, a customer who brought a car in for service claimed a laptop had been stolen from the car,” Mr. Julien recalled. “The tape showed the customer carrying it when he left.”

Wednesday, April 23, 2008

FL Senate weighs bill to “neuter” faux bull testicles on trailer hitches

A bill before the FL state senate would impose a fine of $60 for displaying fake bull testicles on vehicle trailer hitches.

I think we should we sell these in the F&I office
as an accessory!

State Senator Carey Baker is apparently upset over the popularity of a novelty car accessory that displays what looks like bull testicles on the trailer hitches. The false testicles appear to be a national trend and are popular with some pick up truck owners.

According to an article appearing in The Tampa Tribune the Florida State Senate is considering a bill that would impose a fine of $60 for displaying the fake testicles-some question whether or not the debate is an exercise in futility and an assault on First Amendment freedoms. This could be an interesting, if not entertaining, debate.

Apparently when first brought up on the senate floor, the senator’s debate was somewhat hampered by the presence of school children in the gallery.

Purveyors of the faux testicles include two Internet companies- Your Nutz and BullsBalls.

Your Nutz is a California company whose owner, David Ham, is very happy for the free publicity that these efforts generate. Your Nutz offers a variety of “styles” and colors including colors like sun-kissed sienna, dark forest green and an electric blue set that are lighted and produce a glow in the dark attraction.

BullsBalls is an Arizona company and boasts of selling about 500 sets per month. He too suggests that efforts by lawmakers to restrict their use actually create a big boost in sales.

The Tampa Tribune article quotes a cultural anthropologist, Alan Burns, from the University of Florida in Gainesville. According to Burns, “I suspect that it’s not as much some kind of statement about manliness as it is just some kind of goofiness.” (Do ya think?)

Tiny set for a Prius

Burns goes on to say, “I drive a Prius, so I wouldn’t put them on it.” (I guess that would not be a good fit.)

Given the online feedback to this story, it looks like Florida residents are not very impressed with their legislator’s choice of topics to debate- most calling it a total waste of time.


AUTOMOTIVE NEWS - with a twist

Saturday, April 19, 2008

Former Honda store GM pleads guilty to fraud charges in leasing case

U.S. Attorney pursues dealership manager over altered lease documents

Duane Clark, the former general manager of Chezik Honda in Kansas City, Mo., pleaded guilty in federal court to a wire fraud scheme that involved falsifying paperwork on car leases in order to obtain higher commissions for himself, according to a release from the U.S. Department of Justice.

Mr. Clark admitted that from April 3, 2000, through June 14, 2004, he fraudulently altered car lease worksheets and contracts by adding dealer-installed options that were never actually installed. Those altered documents were then sent to American Honda Finance Corporation (AHFC).

The altered lease contracts showed the vehicle with an inflated value due to the dealer-installed options, which did not exist. As a result, Mr. Clark and others received higher commission checks. The total potential loss, as calculated from the altered lease worksheets, was approximately $62,230.

Mr. Clark could be subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution.

This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the Federal Bureau of Investigation.

AFI's take on this:

WOW, I always warn dealership management that leases are one way for a dishonest F&I manager to steal. All the customer agrees to is Monthly payment, initial investment and term. The vehicle's sale price or added equiptment doesn't matter. The interest rate is a non-issue as it is calculated as a money factor.

If they were re-printing leases and adding in parts and accessories, the customer had to have been closed on a monthly payment that reflected these adds. The desk manager then just raised the money factor to match the packed payment. Later, they committed bank fraud by lowering the money factor, adding the accessories, printing a new lease and worksheet and forging the customers name. Wow.

I wonder then, if they were adding accessories from the parts department (as Honda-approved dealer installed options requires an internal RO), the parts such as alloy wheels and spoilers, could then be fenced or sold on Ebay.

Adding to the volume of the Parts department is a must for a dealership General Manager to increase his "commission check" as GM's are paid on total profit dollars. It's scary to think of all the other things these guys were probably doing. I bet getting caught like this was just the tip of the iceberg.


These guys should have visited my automotive F&I managers Laws and Regulations blog:
It will help one to measure a well-run automotive f&i department.

Monday, April 14, 2008

Prank at Car Dealer to be on 'America's Funniest Home Videos'

AWESOME!!! this reminds me of all the crazy stuff I did as a salesman. I probably should have won at least 10 grand. Oh well.

Prank at Chambersburg car dealer to be on 'America's Funniest Home Videos'

What began as a prank on a co-worker at a Guilford Township car dealer could result in a cash prize on Sunday.

The prank involved sneaking a live tarantula onto the shirt of Fitzgerald Auto Mall employee Chris Bowser. The activity was caught on tape and sent to "America's Funniest Home Videos."

At 7 p.m. Sunday, the video will be shown, with the pranksters standing a chance to win the $10,000 top prize. The show was filmed in February in California with Bowser and a couple of his co-workers in attendance.

Fitzgerald manager Bill Barling said that it became known that Bowser has a fear of spiders when a small one appeared in a meeting room one day. On a drive back from a meeting in Maryland, Barling and Adam Labar came up with the idea of buying a tarantula from a pet store and putting it on -- or near -- Bowser. When he sees the spider in the center of his chest, the results are predictable.

"I was a screaming little girl in the video," Bowser said.

Getting the arachnid onto Bowser was not an easy task. The spider was housed in a large metal coffee can and had stretched out its legs inside. When Headley went to get it out of the can, the spider simply wouldn't let go of the can. Early in the video they can be heard bouncing the can off of the floor as Headley attempts to pry it free.

The video got large laughs around the 1436 Lincoln Way East dealership and those folks thought it was a natural for the show. They sent the video off and a few weeks later received a phone call.

A few days later Bowser, Bill Barling and Adam Labar found themselves on a plane to California to tape the show. ABC, which owns the rights to the show, paid for round-trip airfare, lodging and gave them meal money for the three-day trip.

Although the tarantula is the biggest prank played on Bowser at the dealership, co-workers said that it's far from the first. In fact, Bowser's frequently been the target of practical jokes.

"There isn't much that we haven't put this guy through. I think the only thing we haven't done is light him on fire," Headley said.

Link to original article:


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AUTOMOTIVE NEWS - with a twist

Tuesday, April 8, 2008

Car dealer accused of skimming millions

Dealer accused of skimming millions from bankruptcy accounts

(Hey, It was just a little float. He was gonna pay it back)

A British bank and a Virginia bankruptcy trustee have alleged that the dealer engaged in a massive fraud.

A bankruptcy trustee has filed a complaint against a well-known used-car dealer and his family seeking the return of more than $6 million that they spent on personal luxuries, including a Florida property, a housekeeper, and horse boarding and riding lessons, according to reports in the Hampton Roads Pilot.

The complaint filed in bankruptcy court alleges Charles Falk and his family enriched themselves in a massive fraud. The suit also names a former business associate.

In January, two finance companies affiliated with Falk Motor Co. filed for Chapter 11 bankruptcy protection, listing as much as $10 million in debts. Auto Finance Co. and AFC Automobile Receivables Funding II, or AFC II, are seeking to reorganize their finances through the bankruptcy.

A bankruptcy judge appointed a trustee to steer the finance companies through the process. After reviewing thousands of pages of financial records, the trustee discovered that Mr. Falk and his family members allegedly siphoned off nearly $6.5 million from accounts that were collateral for a loan from London-based bank NM Rothschild & Sons.

The bank initially believed that Mr. Falk took $2.8 million and spent it on personal items, such as building a Florida residence; horse boarding and riding lessons for his granddaughter; country club dues and meals; and maintaining and flying his private plane.

The trustee said in court papers that he has since found that Mr. Falk and his family improperly spent more than double the $2.8 million over two years on personal expenses.

In one example, one of the Falk finance companies paid the premiums on a $500,000 life insurance policy for a longtime employee. When the employee died, the company paid the $4,200 funeral bill, yet Mr. Falk himself was the beneficiary of the policy.

Mr. Falk, who founded his buy-here-pay-here business more than 30 years ago, is not himself listed as an owner or officer in the two finance companies. His son and daughter are listed as the principal owners.

In the complaint, the trustee charges 11 counts, including conspiracy, fraud and unjust enrichment. The complaint seeks the return of more than $6.4 million plus $350,000 in punitive damages.

Old Charlie should have learned Automotive F&I Compliance from the insider:

Tuesday, April 1, 2008

Customer's $100K BMW is Involved in Accident at Dealership

Customer’s $100K BMW is involved in an accident in the early hours of Easter Sunday, Owner wants dealership to pay

Santa Rosa California real estate agent Charles Himes was awakened before 6AM on Easter Sunday morning with a call from the police about his wrecked car

DealersEdge Daily Headlines

Himes’ 500-horsepower, V-10 BMW M5 was in the shop for some warranty repairs. On Friday afternoon, the service advisor called asking him to return to the dealership, drive his car over the weekend and then return it Monday to finalize the repair. Apparently the dealership felt that an extended road test was needed. Himes declined (he was in a loaner) and made arrangements for the dealership to take care of the road test, all according to an article in the Press Democrat.

When Himes arrived at the scene of the crash, an envelope with the name of a dealership employee was found in the back seat. Himes, along with Santa Rosa police, then presented themselves at the doorstep of the service advisor. At this point no hit-and-run charges were levied.

Not long after the police left, a dealership manager arrived and fired the service advisor.

Now Himes is demanding that the dealership pay off his car loan and replace the vehicle. According to the dealership, this is being treated as an insurance matter and a report has been filed with their insurance carrier. Himes has hired an attorney to press his case.

What a cool car - such a shame.

According to the dealer, the employee violated company rules by agreeing to take the customer’s car home.

According to Himes, when he was asked to take the vehicle for the weekend and he declined - he then agreed with the service advisor that he should drive the vehicle over the weekend. Himes is quoted as saying, “I told him I don’t care who drives it".

So who’s to blame? Should the dealership step up and cover the customer’s loss? Should the service advisor lose his job? Does the fact that the car was wrecked in the middle of the night have any bearing on the dispute?

Reality in an Automotive Dealership's F&I office:

Automotive News - With a Twist:

Tuesday, March 18, 2008

Percentage of Negative Equity Trades Lowest in Three Years

That's not what I've been seeing lately. From most of the deals this month, pepole are more killed in their trades than ever. Anyway, life goes on. Next.

F&I e-weekly

The percentage of negative equity for the first quarter of 2008 is the lowest it has been in this period for the past three years, according to the Power Information Network (PIN).

The drop in upside down trades to 29 percent comes after a downward trend for several calendar quarters.

The report, released March 7, said that despite the drop in upside down trades, those consumers that do trade with negative equity owe more than in the past. “So far in the first quarter of this year, the average negative equity amount has been $3,930, up from $3,587 three years ago,” the report said.

The report suggested these trends could be due to consumers with modest negative equity on their vehicles refraining from trading those vehicles in, and those that are the most upside down continuing the trade-in trend.

Let's hope the trend continues downward.


Monday, March 17, 2008

Dealership employee pleads not guilty in unusual embezzlement scheme

GM dealer’s account used to buy snow removal equipment

Tim Donovan, a former employee of a General Motors dealership in Greenfield, Massachusetts, has plead not guilty to charges that he allegedly ordered a number of sand spreaders and snow plows through the dealerships parts account. Mr. Donovan is accused of selling the equipment to third parties and keeping the proceeds, according to a report in the Brattleboro Reformer.

The alleged embezzlements took place over roughly two months in 2006.

According to an affidavit from the Vermont State Police, Mr. Donovan admitted to ordering two Fisher sand spreaders and one Boss snow plow and selling them at greatly reduced prices, keeping the profit. After confessing to this aspect of the crime, he denied doing the same thing with two more snow plows

In total, all five items cost roughly $25,000. The police assert that he resold them for a total profit of roughly $12,400.

The dealership’s insurance premium was increased by $5,000 a year as a direct result of the theft.

According to the State Police affidavit, Mr. Donovan told his boss when confronted that he was selling the products "on the side for cash money to fuel his cocaine addiction."

Great, another fine example of people in the car business.


Link to original source


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Thursday, March 13, 2008

Dealership employee at center of $1 million car theft ring

Three men charged in sophisticated theft and resale scheme that officials say netted $1M

Three Detroit men face more than 500 felony charges on claims they netted more than $1 million in a sophisticated scheme to steal cars from the streets, alter vehicle identification plates and resell them, according to a Detroit News report.

The scheme involved an insider at a Detroit area General Motors dealership who made keys to match the VINs, which were visible through the windshields of cars that prosecutors allege the thieves scouted in advance.

Almost 120 cars were then easy to steal, using the keys to unlock them and drive away. Prosecutors called the operation one of the biggest and slickest they had ever seen. Meanwhile, the ring purchased similar, junked cars whose vehicle identification plates were swapped into the stolen vehicles.

The trio is alleged to have gone to auto auctions and circulated fliers in Detroit neighborhoods advertising cash for junked GM vehicles.

The model, year and even color of cars targeted for theft sometimes were based on inexpensive cars the alleged thieves had purchased. Sometimes the trio went shopping for cheap junkers to match something they had stolen.

The dealership employee, whom police declined to identify, has already been convicted of charges brought in 2006 stemming from an investigation conducted by a county auto theft taskforce and General Motors.

Fewer than 20 vehicles have been recovered so far in the 16-month investigation that culminated when charges were filed against the three.



All F&I managers need to joint the affiliate program at the Credit Restoration Factory. Affiliates earn a $50 referral fee per lead.


AUTOMOTIVE NEWS - with a twist

Friday, March 7, 2008

Yes I am going to have to trade my Infiniti FX35

Not trying to give Infiniti a plug (as they are not paying me), and because recently I posted some very cool spy pics of the 2009 Infiniti FX on this site, I must make this announcement:

Infiniti has just released a photo slideshow this morning of the 2009 FX on the Infiniti website.

The real thing is even more wicked than the spy pics. The FX50 is going to be a BEAST !!! - check it out:

Link to 2009 FX slideshow

*** Attention Infiniti Marketing: ***

You really should consider putting a small (or large) ad on this site.

I own an Infiniti Fx35 which was purchased new (and you know your main purpose is to move new vehicles off the lot's of the franchised Infiniti dealers).

The fact that I personally am an owner has to mean something even if the prospect of being able to show advertising to the many visitors of this progressive and cutting edge blog isn't enough.

You know that spending Infiniti's promotional dollars on any of AFI's websites is the wisest use of each one of those dollars.

Email so we can work something out: For showing this level of creativity, you could get a promotion.

We then will as a joint venture, shout Infiniti's praises from the heavens. Hoorah.

I am serious.


Tuesday, March 4, 2008

6 Things F&I Managers Need to Stop (Or Start) Doing

This is a great article I found in Feb's F&I Magazine. The enhancements are mine.

6 Things F&I Managers Need to Stop (Or Start) Doing
By Ron Reahard

All of us seek role models, and we expect our role models’ lives to be an example of what they speak. Like it or not, co-workers and customers will believe what you do long before (and long after) they will believe what you say.

Too often people who call themselves “managers” will say one thing, but do another. Leaders lead by example. They believe in what they say, they live what they believe and they become successful because their actions clearly demonstrate their values.

Like it or not, we’re all role models. As an F&I manager, your sales force will quickly determine whether you truly believe in your products, or whether you’re just trying to squeeze extra money out of customers.

Being an F&I professional requires that you possess the qualities of someone worthy to be a role model: a positive attitude, a commitment to your craft and a genuine belief in your products. You can always tell you’re in the presence of an F&I professional by the way he or she treats every customer, as well as every co-worker. His or her primary goal in every interaction is to help the other person, not just themselves.

F&I professionals never brag about how much money they made on someone. F&I professionals know that when your focus is on helping customers, you don’t have to worry about making money; you’ll make more than you ever thought possible. To be an F&I professional, there are six things you need to stop (or start) doing, because whether you like it or not, you’re a role model.

1.STOP Disparaging Your Products

It’s amazing how many times I still hear F&I managers describe credit insurance as “choke and croak,” environmental protection as “mop and glow,” and theft deterrent products as “etch-a-sketch.” Denigrating your own products to anyone tells everyone you really don’t believe in them.

Remember, every F&I product we offer has real value for the customer. F&I professionals can reinforce this belief by telling the customer, “At this dealership we only offer F&I products we believe in.” You must demonstrate your belief in F&I products daily. It’s easy to tell whether or not an F&I manager really believes in his or her products. He or she buys them — all of them! If you don’t buy all of the products you sell, you’re telling every salesperson in the dealership you don’t believe in them.


All F&I Managers: join the affiliate program at The Credit Restoration Factory. You'll make $50 for every referral and when their credit is repaired, they will come back to see you to buy the car. Beautiful.
click here: