David Robertson returns with a warning: There’s a New Sheriff in Town page: 12 F&I 20/20 The F&I Professional’s Newsletter A Division of EFI™ VOL. 2, ISSUE 1 © Mad Marv talks Mind Control page 17 $4.99 February-March 2021 Cox Automotive Dealer Index Fourth Quarter 2020 page 2 George Angus’ advice on Handling a Bad Month page 10 F&I Spotlight Ron Reahard opens up 1

F&I 20/20 The F&I Professional’s Newsletter A Division of EFI™ VOL. 1, ISSUE 2 Top stories in this issue © F&I Spotlight F&I Pro Tip F&I Pro Tip Dan Mason shares his love of painting pictures Page 4 Stop Sign David Robertson of AFIP returns with some sage advice about the New Sheriff of the CFPB and getting your house in order. Page 16 F&I 20/20 Spotlight We shine the spotlight on Ron Reahard in this issue. His undying passion to leave the F&I community and dealers in a better place than when he began his career shines through in his interview. Check it out on Page 5 Show Me the Money G.P. Anderson yields his page to Carl Grane of Easy Care this issue. He offers 6 steps to becoming an F&I Leader. Page 9 Mad Marv Mad Marv returns to offer his take on industry trends and best F&I practices. In this issue he talks the difference between average and top producers. Page 14 Stop Sign Show Me the Money News Around Town Produced by NADA's Industry Analysis division, NADA Market Beat is a monthly report on U.S. new light vehicle sales; it replaces the NADA Monthly Sales Recap. at June 2020 Cox Automotive Dealer Sentiment Index – Fourth Quarter 2020 Derived from a quarterly survey that Cox Automotive issues to a representative sample of franchised and independent auto dealers from around the country, the Cox Automotive Dealer Sentiment Index (CADSI) measures dealer perceptions of current retail auto sales and sales expectations for the next three months as “strong,” “average” or “weak.” 2

Here we are deep into the second quarter and the whirlwind of 2020 seems to be fading in the distance. Perhaps the most used acronym last year was easily COVID19. It struck fear into the hearts and minds of everyone because there was no treatment but you tough minded car folk rebounded. And from what I’ve seen already, many had record years in the box with the biggest W2’s ever. How is this even possible? Because you’re tough, that’s why! Most of us have been through some very trying times in the car business when things looked grim. 9/11, the dot.com bubble, the great recession and many more for you oldsters. Yet through it all, you bounced back stronger than ever. Car people are not your average run-of-the mill foilk. For more than a 120 years, you have persevered and even thrived in the face of regulatory overreach by the feds, snarky articles by so-called journalists and even flack from politicians. When I read success stories of how some have risen from the ashes, I’m encouraged to see what 2021 will bring. My prediction is, most will be logging records throughout this year. Lets continue showing them all how great this business is and keep on rocking! MM Bits & Pieces………. Partners... APCO Holdings, LLC's EasyCare and GWC Warranty brands, providers of F&I products offered by franchised and independent dealers across the country, have collaborated with the Association of Finance & Insurance Professionals (AFIP) to lead certification courses designed to give dealership professionals the knowledge they need to maintain compliance requirements. Read about it here. Movements… Kurt Hornung Named F&I VP at RV Retailer RV Retailer, LLC appointed Kurt Hornung as corporate vice president, finance & insurance. Kurt Hornung will be responsible for all F&I operations across providing training and development for RV Retailer’s store sales and F&I teams. He will be responsible for the company’s retail lending relationships and the industry-leading set of proprietary RV protection, service and assistance products offered in all RV Retailer stores. He will also be a key team member building out the customer loyalty programs of RV Retailer. He will report to John Rizzo, EVP and CFO. Giving it Back… Austin Toyota dealership gives back to the Latino community in a big way Three charitable organizations that serve Austin's Latino community believed they were being presented with a big bottle of sanitizer from Charles Maund Toyota. Instead, they were in for a big surprise — and a big check. 3 F&I 20/20© is a bi-monthly Newsletter for the professional F&I Practitioner. This publication is a division of Ethical F&I Managers (EFI™) and is copyrighted. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher at: Marv Eleazer 4043 Liska Circle Valdosta, GA 31605 fordpantera@yahoo.com (229)460-3310 Editorial Board Gregory Arroyo garroyo@dealersocket.com Tony Dupaquier tonyd@theacademylive.com Shannon Robertson shannon.robertson@afip.com G.P. Anderson gp.anderson724@gmail.com

Riddle me This O by:Dan Mason ne of the most difficult tasks we have is helping customers get out of their own way. This is mostly attributed to the fact they have predetermined ideas of how business is conducted in a dealership. Either they’ve had a previous bad experience or have heard horror stories from others about bad practices. Unfortunately, it still exists in some stores. So, how do we help our customers get past this? The answer is simple. We have two ears and one mouth for a reason. We should be doing twice as much listening as talking. Riddle me this? What is so fragile that when you say its name you break it? Silence. Let’s talk about the psychology behind this idea. There’s a difference between a statement and a question. A statement does not require a response. If none is required, there is no need to think. If there is no need to think, there is no emotional response. A question requires a response. In order to respond, it requires thought. If we ask the right questions, the thoughts will trigger an emotional response. How does this work in F&I? First, stop doing a customer interrogation. All you are doing by interrogating your customer is putting up a wall, not tearing one down. The interview was created to assist in setting up the menu. Yet instead, it’s caused many finance managers to become focused on being menu experts instead of relationship and product experts. When they come into our office they are typically on guard and defensive. Put them at ease by saying “Tell me a little bit about yourself.” You will see a big change in their body language. It’s almost magical! Their shoulders drop, they may exhale or sit back in their chair as well. As they start talking, it is critical that you sit back, relax, and listen. Don’t start typing or working on your computer. By stopping to pay attention to them, it shows that you care. One of the biggest mistakes made is when some finance managers begin their presentation. Many launch into expert mode and want to tell their customers everything they know. This is a bad mistake! When we roll into expert (tell) mode, we run the risk of losing the customer’s attention. I mean we all love the sound of our voices, don’t we? So, how do we change this? Instead of droning on when objections surface with canned responses, use stories and questions! By asking the proper guided questions, it creates a conversation. The vehicle they are purchasing is tangible. Customers can’t wait to show off their new ride to friends and family. Riddle me this? What is so fragile that when you say its name you break it? Silence. But, I’ve yet to see a customer show off their new service contract to a friend or much less, even mention it. So how do we build the same value in a non-tangible? For starters, we offer risk management products and the value lies is having protection in case the customer faces a problem. Asking the right question to trigger an emotional tie-in to the products you offer is a good way to overcome a doubter. Let me give you some examples. “Mr. Customer, you said earlier that you work late at night. Picture yourself leaving work at 11:00, it’s 10 degrees outside, and your battery is dead. What would you do?” It’s critical to wait for your customer to answer. This triggers the emotional response we are looking for because their thoughts go to a time when they had a dead battery. “One great thing about this service contract is that it comes with battery jump-start coverage. Instead of worrying, just simply go back inside where it’s nice and warm. Give us a call and we are going to send someone out to get the car started for you. Doesn’t that sound much better?” Here’s another example. “Mr. Customer, picture your wife driving down the highway and the car blows out a tire. How safe would you feel with her changing that tire? The great thing about this service contract is that it comes with flat tire assist. Your wife only needs to give us a call. We’ll send someone out to change it getting her back on the road safe and sound”. When you tell this story with her sitting there, guess what she’s thinking. ‘He’d better get this coverage or he’ll be sleeping on the couch’. What you’re doing is taking your customers on a mental tour of the product. That’s how you make an intangible item tangible. This is also the time to take the information you learned from your customers when you asked them to tell you a little about themselves. This shows that you care and that you listened. As GP Anderson says, “Scratch their record” by letting your customers know that this is not the same process they’re used to. Become a better professional by listening more and speaking less. Ask great questions, tell great stories, and don’t forget that silence is golden. Have fun! 4 Dan Mason is the Asst VP National Sales Director for Principal Warranty Corp.

F&I 20/20 Spotlight Profile: Ron Reahard & Associates Achieving F&I Excellence Management Certification Program R eahard & Associates believes the financial services process should add genuine value to the customer’s purchase experience by providing a knowledgeable professional who is capable of helping them make informed decisions about the options available in connection with their purchase. Acquiring that ability starts with our 3-day Achieving F&I Excellence Management Certification Program, where managers learn our 10-Step, non-confrontational, consultative approach to selling F&I products. This F&I process that is custom tailored to today’s increasingly informed, online (and impatient!) consumer. Selling is nothing more than making someone want what you have. What an F&I professional must possess is the knowledge and expertise to help the customer make a better decision for themselves and their family. The entire focus of our training is on helping F&I managers improve their ability to help customers. Because the better you become at helping customers, the more products you sell, and the more money you make in F&I. The reality is, F&I managers encounter the exact same objection, every day, from every customer, to virtually every F&I product: “I don’t need it.” If an F&I manager is unable to help the customer see why they do need a particular product, the customer won’t buy it. Our training teaches managers how to take a customer who walks into the F&I office saying, “I don’t want any of that stuff,” and 30 minutes later have them walk out of that office smiling, thanking us for our help, after having bought three or four F&I products. That is what our 3-day class is all about, and it’s what our training enables new and experienced F&I managers to do. We offer both regularly scheduled classes and private classes, with dates and locations available at go-reahard.com. Most classes run from 8:30AM – 5:30PM. Enrollment and payment for the class can be done entirely on our website. Prior to the class, managers receive a self-study guide and self-assessment test, to ensure they will get the most benefit possible from the training. Each participant receives a comprehensive training manual, multiple visual aids and supporting documentation. Topics covered during the class include: * Professional F&I Management * Customer-Focused Selling * A Customer Focused F&I Presentation * Customer Repayment Options * Risk Management Options * Vehicle Protection Options * Credit Evaluation / Analysis * Laws and Regulations * Professionalism Interactive classroom instruction is provided by one of our experienced and passionate trainers, either Ron Reahard or Rick McCormick. Th class includes daily consultative selling exercises, evening homework assignments, and multiple role-play sessions. The class also includes Certification tests, Certification Award, individual performance reviews, and a personal follow-up phone contact by the instructor. We are so confident this will be the best F&I training your manager will ever experience, we even offer a WOW! Warranty. Check out our REGISTRATION page to see upcoming classes! 5

F&I 20/20 sits down with Ron Reahard as he reflects on his career and body of work in the field of training. *So, let’s get straight to it. Reflecting back, give us a description of your entry into the car business and what motivated you. I got in the car business the same reason a lot of people get the car business. I needed a job. In 1975 I had just gotten married, going to college and working at the local manufacturing plant. Due to the OPEC induced recession, the company announced a major layoff. There was an ad in the newspaper for “Automobile Salesperson Needed.” I applied and lo and behold, they hired me right there on the spot. *What roles did you fulfill and how did these experiences prepare you for a career in training? I ended up selling cars for two and half years before going into the F&I office. The main reason I wanted to go into F&I was because I thought our F&I manager was a jerk. Customers went into his office excited and happy. They came out frustrated and unhappy. I was confident I could do F&I better than that. I was an F&I manager for six years. Following that, I was a representative for a credit insurance and service contract company for about a year and half, working with F&I managers to improve performance and soliciting dealers to sell our products. In 1985, I was promoted to Director of Training. In 2001, I finally started my own F&I training company, Reahard & Associates. I think the fact that I know the fears salespeople have about turning customers over to the F&I department has been a huge factor in making sure F&I is a positive experience for the customer. Because of what was being taught when I started into F&I, (the sales techniques of yesterday are the felonies of today!) it made me determined to change the process, so that F&I adds genuine value to the customer’s purchase experience. Every business is in business to help customers. “If you want to make more money, you have to help more customers! That’s what we teach. It’s what we do” *At what point did you decide that training was your professional calling? When a new F&I manager I trained, Dave Ressler, bought his first dealership. He called me and invited me to his grand opening, and told me what an impact my class had had on him. He ended up owning multiple dealerships, and over the years, many of his F&I people also attended my class. *Did you immediately form a company before starting out training or began as an agent? I wanted to go into training immediately. However, my boss felt it was critical I first start out as a representative, calling on dealers, so I would understand their role. He was right. It also enabled me to see that there are as many ways to run a dealership as there are dealerships. After 1½ years as a rep, I was promoted to Director of Training in 1985. I worked for three companies as Director of Training before finally starting my own company in 2001. *How many employees do you now employ and what are their roles? We currently have seven full-time employees, and are in the process of filling three additional positions. We have 3 full time trainers who do in-dealership training, classes, workshops and seminars. We also have four people in the office who coordinate all of our training events, manage our online training program and our multiple websites, including our autoconsumerinfo.com website. The office team also prepares all our training materials and advertising. They shoot and edit our online training videos, and manage F&Insight, our F&I transaction video recording system. *What excites you most about the place you’re now at with Reahard & Associates? I think what still excites me more than anything is the team we’ve built, and the fact that they are truly committed to improving our industry, and helping our dealers improve the F&I process. To me, helping others is the essence of life, and that is what selling is. Selling is about helping someone else get what they want, which enables us to get what we want. When the focus of selling is on helping the customer, both parties win. Changing perceptions, helping dealers improve their processes, and helping F&I managers improve their skills still excites me. Now more than ever, each day offers us another opportunity to help dealers and their F&I managers help more customers. 6

*Tell us about your hobbies and leisure time away from the office. I’m a big NASCAR fan, and my wife and I normally attend at least four races a year. We typically attend the SEMA show in Las Vegas every year. We also enjoy spending time on our boat. *Let’s move over a bit to your family. How supportive has your wife been in forming your career? Reahard & Associates would not exist without my wife. She was convinced we could create a complete F&I training program that dealers, agents and companies would gladly pay for, because it was totally different than what most companies were offering back then. The 3-day Achieving F&I Excellence class is the foundation on which we built our ongoing, in-dealership and online training. Without her belief in what we were teaching, her confidence in my abilities, and her working side-by-side to make sure we were successful, R&A would not exist. *How do you view the future of F&I managers as an integral part of dealerships going forward? The F&I department will always be an integral part of dealerships as long as there are dealerships. F&I plays a key role in ensuring all documents are properly completed prior to delivery of the vehicle. F&I also acts as a check and balance for the sales department, to ensure there is no misrepresentation being made by anyone involved in the transaction. F&I professionals have a bright future, as long as they add real value to the customer’s purchase experience. Customers will always appreciate having a knowledgeable professional who can assist them in obtaining acceptable financing, explaining their options, answer their questions, and help them make the right decision for them and their family. *Do you believe the F&I process should be trained respectively by compliance experts and F&I trainers? Yes. When dealers send their manager for F&I training, they expect them to come back and sell more products and make more money. They also expect their manager will learn sales techniques and follow a process that will be compliant and a good experience for the customer. Unfortunately, in the F&I office, ignorance can get you in just as much trouble as deception. While we cover compliance and include the laws and regulations in our training, I would encourage every dealer to ensure their managers are also AFIP or ACE Certified. “Training is a process, not an event. The worst thing a dealer can do is send their manager to a class, and then let them twist in the wind” *In your opinion, is there any real future of taking the F&I process completely online? Selling intangible products like VSC’s and GAP is quite different from selling tangible products like a vehicle. While it is more difficult to sell these products online, it is certainly possible with Zoom and video conferencing. However, just as we know in-person education is more effective than online learning, so is in-person selling. If so, what would that look like and how different would the training be? Whether more of the F&I process moves online is going to be determined by the customer. However, I believe dealers know they have to ensure customers enjoy the purchase experience and the F&I process, so that the vast majority of customers will want to come to the dealership to buy and take delivery of their new vehicle. *How often should an F&I manager upgrade their training? Training is a process, not an event. The worst thing a dealer can do is send their manager to a class, and then let them twist in the wind. You can’t become a professional at anything after a week of training. Continuing education and ongoing training should be a part of every F&I manager’s weekly routine. Does Reahard & Associates offer an advanced class and if so, how does it differ from basic training? Yes, our 2-day advanced class, held typically once a year, is for managers who have attended our Achieving F&I Excellence class and builds upon their initial training. Attendees must have at least one year of experience, but most have many more. It’s primarily two days of role-playing with other experienced F&I professionals following the same F&I process they follow, to identify areas of potential improvement. *And finally, what legacy do you hope to leave behind when you retire? I hope we helped improve the customer experience by changing the perception of F&I managers. Our job in F&I is not to sell stuff. Our job is to help customers. 7


Becoming an F&I Leader W By Carl Grane hat does it take to become an F&I Leader in your dealership versus an F&I Manager? As many of you have participated in a comprehensive F&I training class in your career, I am sure someone has shared with you their interpretation of the “Responsibilities of the F&I Manager”. And, this idea of got me thinking about the role sled dogs play in the Iditarod competition. An excerpt from an article in leadership Iditarod EDU describes a dog team. “There are 4 different positions on a team. The dogs in the front of the team are called Lead dogs and are usually the fastest runners. They set the pace and carefully follow the musher’s commands. Being able to read the trail and make quick decisions because the musher can’t always see what’s ahead, is a must. It’s the lead dogs’ job to avoid danger or stop the team. Most teams have two leaders and they rotate them into the other positions. Some are better on hills while others may be better on ice or crossing rivers. The musher decides which dogs best handle the trail and weather conditions. Behind the leaders are swing dogs which are usually lead dogs in training and lastly, wheel dogs are placed right in front of the sled. Each position is very important for the team. Like with any sports team, all the dogs and the musher must work together to be successful. Becoming an F&I Leader in your organization and achieving elite performance status that we all strive for, I challenge you to think about these 6 responsibilities and their order of priority. 1-Train your Sales Team Industry-wide, we don't do an adequate job in training and preparing our sales teams. What training they do receive is often “not F&I friendly”. To be a leader in your dealership become active in training your sales team. Train them on how to advocate for F&I and the benefits you offer. Hey, the list of training topics you can train on is endless. Personally, getting involved and mentoring sales consultants is a key role of becoming a Leader. 2-Maintain Excellent CSI Today’s customers are well-armed with information from the internet. However, much of their information can be incorrect. Seek to educate your customer-don’t sell them. Inform them of the OEM limited warranties and build value in yourself as a credible professional. Show them the financial exposures of ownership and offer solutions. Handle yourself with professional poise and always show sincere interest in helping them make the right decision that benefits them. 3-Protect the Dealership With a new President in place, we already have a few new “sheriffs” in town starting with a new CFPB head. While compliance may have been put on the back burner the past several years, it’s time to revisit your compliance management system and up your knowledge game. The old excuse of “I didn’t know that…” is no defense. A Leader will train and execute well and with ethics. “Get out of your office and help your team. You cannot lead from behind a curtain. Help the sales manager properly structure the deal from the onset and submit to the proper lending sources. Help them get what they want and they will reciprocate” 4-Improve your Dealership Cash Flow As a former GM, I very much appreciated a positive cash flow. As an F&I manager, you were chosen not only because you were good with clients and generating income, but because of your administrative skills as well. Ensuring your deals are clean, proper signatures and timely funded is vital to your success as a Leader. 5-Secure the Deal This is a basic tenet of our position as an F&I Leader. Get out of your office and help your team. You cannot lead from behind a curtain. Help the sales manager properly structure the deal from the onset and submit to the proper lending sources. Help them get what they want and they will reciprocate. 6-Generate F&I Revenue Wait, are you saying generating revenue and our paychecks are the LAST priority? No, I haven’t lost my mind and yes, generating F&I is your last priority. Because, as a F&I Leader once you have successfully implemented & accomplished priorities 1-5, priority #6 will come much easier to you. Like swing dogs learning the trail, there are many F&I Managers in our industry grappling with problems in a store. However, there a very few F&I Leaders out there. These skilled lead dogs are the top 10% that are students of the industry and challenge the status quo. To become an F&I Leader you must learn the trail and be willing to take a step back in promoting others. Leaders not only lead the team, but they also push others forward. Are you ready? 9 Carl Grane is the National Training Director for Easy Care

The F&I Prophet-George Angus-has something to say Handling a Bad Month For some reason, it seems like every couple of years, an anomaly occurs where F&I professionals, all over the country, hit a period of tough deals. Cash deals, capped deals, and overly sales resistant customers seem to come out of the woodwork. Over the years, I have learned that these periods are a fact of our business. Occasionally, through no fault of the F&I manager, there will be a run of tough deals, (many times compounded by a period of slow sales), that transcends every geographical market in the country. And I have never heard an explanation of how these temporary dips can occur over so much of the country at the same time. If we could figure out when these phenomena were going to happen, we could take our vacations at that time and miss the aggravation. However, the real problem with these periods is that they can drive F&I managers crazy and make them start changing things that shouldn't be changed. But it’s important not to panic or overreact and start changing what has made you successful in the past. Remember it’s temporary. It isn't caused by you. It will pass. In many ways, how we handle those inevitable tough periods is a measure of our professionalism. Top F&I veterans have learned to relax and ride it out and accept that there’s really not much you can do about it. One of the unique features of the F&I job is that we have to be self-motivated and self-directed. The key is to make sure we are fresh, positive, and ready when the next customer comes through that door. Control your head. You’ve all heard of the Serenity Prayer. It was first offered in the early 1940’s by the theologian Reinhold Niebuhr and has been used as a guiding principle for many recovery groups and become part of the accepted wisdom of society over the years. It goes something like this: Grant me the serenity to accept the things I cannot change, Courage to change the things I can, and the wisdom to know the difference. There’s a message in that for F&I professionals so read on. 10

Don’t stress over the things we have no control over. Recognizing that we do not control the market and that we probably don’t have much control over how many cars get sold is the first thing we should realize. When sales are down, there is a lot of pressure on everyone in the dealership. Don’t let that effect you. If you panic and start to overreact, it will manifest itself into your interactions with your fellow employees and, more importantly, with your customers. We have to calmly focus on our job and be sure we maximize every opportunity that does come along during these periods. Focus on constructive activities. If you have some extra time on your hands, try to stay busy. Hone your skills. Practice your presentation. Develop your lender relations. Be a cheerleader. Whether you know it or not, the people around you look to you for direction. Show by your demeanor that you are not worried, there is no reason to panic, and that you are a true professional who has dealt with these little dips in business before. Ask the sales department if there is anything you can do to help make a deal. Stay positive. “Create some F&I Karma” I got this tip when I was a relatively new F&I manager. I had been rolling along, fat dumb and happy, making money, when suddenly I ran into that inevitable run of customers who just didn’t react to my presentation. It was like I had all of a sudden lost my “touch”. As this slump continued I got to the point where I was frustrated enough to call the product representative who had initially trained me and asked for help. He asked some questions, reviewed the reactions I was getting, and then he said “OK, I have the answer”. “Keep doing what we taught you. But first, clean your office”. I said “What?” He said “Go out to the wash rack and get some cleaner and a rag and clean every inch of every surface in your office. Straighten out all of your files, organize your forms in logical order, and keep doing what you’ve learned to do”. “Create some F&I Karma” he said. Now I thought he was nuts. What would that have to do with my F&I presentation? But I was desperate enough to try anything. So, I did as told. It took me an hour or so and my office was clean, really clean, and organized. The result? The next customer took everything I was selling. And I went on a “roll”. My numbers were better than ever and it was like the job was easy again. Now this may seem like a silly suggestion and I can’t explain it, but it just works. Does cleaning your office change the way customers behave? Maybe not. But there may be some logic to this suggestion. Sometimes it's interesting what seemingly insignificant, simple, things can do to improve your F&I performance. The environment of your office is one of those things. When a customer first enters the F&I office, they will be heavily influenced by what they see, hear, and smell. Therefore, it is important that those things they see hear, and smell works for us, not against us. Make your office look like a professional business office. Get rid of the clutter. Clean it up. Most of all, realize that it is temporary. This too shall pass. By the time you read this message there’s a good chance that the “tough run” will have already become a memory. That’s how it works. But in the meantime, relax, stay sharp, clean your office and focus on being ready when that next customer comes through the door. 11

There’s a new sheriff in town… and the deputies will have marching orders soon. The time to act is now. by David Robertson, MBA T he Democratic party now controls the White House and both houses of Congress, giving it nearly unbridled leverage to pursue its agenda. What does that mean for you? You can expect both the FTC and CFPB to be significantly more aggressive in both oversight and enforcement than during the last four years, particularly in the areas of vehicle sales and F&I practices. Top targets of dealer audits or action Based on the FTC’s The Auto Buyer Study: Lessons from In-Depth Consumer Interviews and Related Research and Buckle Up: Navigating Auto Sales and Financing, both published in July 2020, the following areas will be targets of scrutiny or intervention. Statements made by FTC Commissioners Rebecca Kelly Slaughter and Rohit Chopra in the matter of Bronx Honda reinforce their priority status. Biden recently named Slaughter to lead the FTC and nominated Chopra to head the CFPB. 1st Priority – Voluntary Protection Products (VPPs) In your store today, are these products being properly presented and disclosed? Do product prices align with their value? This is a major blip on the regulators’ radar screen. Solution The NADA/NAMAD/AIADA Voluntary Protection Products: A Model Dealership Policy is a comprehensive, easy-to-follow guide. Copies are available from NADA. Or email a request to Shannon.Robertson@afip.com with your postal address and I’ll send you a copy at no charge. The VPP policy sign achieves three objectives. 1st, it alerts the customer that the voluntary protection products have value, are optional, and are not required to purchase or lease a vehicle or obtain financing. 2nd, they remind the F&I practitioner of the standards imposed by the program. 3rd, they tell regulators that the dealer makes a proactive effort to ensure fair customer dealings. 2nd Priority – Take a Nonpublic Personal Information (NPI) Compliance Inventory Is a corporate compliance officer working in the dealership to oversee an Information Security Program drafted and implemented in accordance with the Safeguards Rule (effective May 23, 2003)? Is a corporate compliance officer working to oversee an Identity Theft Prevention Program drafted and implemented in accordance with the Red Flags Rule (effective Jan. 1, 2011) and approved by the Board of Directors? Solution If you answered “no” to either question, DealerAide NPI Compliance Suite can get you in compliance with the Safeguards Rule, Red Flags Rule and Disposal Rule efficiently and with minimal disruption in your operation. DealerAide is administered by Member Benefit Services, Inc., which operates under the AFIP umbrella. DealerAide provides modifiable templates, task-specific job descriptions with employee orientation, and signage – all supported by live customer service to help compliance officers configure the program to the specific needs of each facility. Program updates, including new hire orientation, are provided at no charge. DealerAide was most recently updated by Randy Henrick, Esq. 12

3rd Priority – Vehicle Sales and F&I Compliance Checkup Are your Desk and F&I personnel familiar with the state and federal laws governing all phases of vehicle sale consummation and financial services transactions? Do they comply with them in their day-to-day practices? Solution AFIP Certification, the industry-standard for comprehensive regulation education, delivers live interactive instruction that incorporates behavior modification training. It provides students with a working knowledge that helps translate rules into practices. To earn Basic Certification, candidates must pass a 200-question proctored exam with 150 federal law questions, 25 state law questions and 25 ethics questions – and signify a commitment to abide by AFIP’s Code of Ethics. AFIP bestows a professional designation on successful candidates depending on the certification tier achieved – e.g., Certified Professional in Financial Services (CPFS) for the first level. In addition to dealership personnel, AFIP certifies select captive and institutional finance source dealer contact personnel, aftermarket product provider employees, and independent general agents. AFIP has completed more than 70,000 certifications to date. The industry member special price for a basic course is $695, plus shipping. During the pandemic, AFIP’s Virtual Classroom Certification Boot Camp has become the preferred training venue. Candidates attend three 2.50-hour sessions from Tuesday through Thursday, followed by a final exam review on Friday. We typically offer morning and afternoon sessions to give trainees scheduling flexibility. The proctored exam is completed online. A score of 80% or higher is required on all three modules. The course includes the CARLAW F&I Legal Desk Book, access to CounselorLibrary.com for state laws, a Reynolds Document Solutions contract covenant tutorial provided by Terry O’Loughlin, JD, MBA, and a comprehensive multimedia online training platform. The AFIP certification program operates under the legal guidance of Hudson Cook, LLP. On a closing note… I’ve been calling on car dealers in one form or another for 45 years. If I made them money, they remembered my name. If I kept them out of trouble with regulators, I kept their business. David Robertson is the executive director of AFIP the Association of Finance & Insurance Professionals and regularly contributes his decades of knowledge to various publications. He also lends his expertise at speaking engagements throughout the industry. When needed, he also serves as an expert witness in court proceedings involving automobile compliance cases. 13

Mind Control F by: Mad Marv or decades manufacturers have been trying to change the way people think in order to sell more products. The belief that luring a competitor’s customer base with tantalizing ads with specific background music will bolster their bottom line. It’s all designed to change the viewer's perception of not only the product but the brand they’re trying to establish. Some have succeeded to the point that their trademark names have become household descriptors. Think Kleenex, Q-Tips, BandAid, Scotch tape, Vaseline, Sharpie, and you get the picture. These are examples of marketing genius at its finest and at just the right time in history. It’s almost as if the public has been brainwashed into using these terms. Most actually believe these brand names are in the dictionary when in fact they’ve been lulled by marketers and viola! Even the US government tried tactics involving mind control dating back to the 1950s in an effort to be ahead of other nations in the area of defense albeit blindly so. Sales folk use persuasive skills to invoke customer interest in their products not unlike other manufacturers though in a dealership, it’s usually conducted in person. But no matter how good we become there simply is no way we’re ever going to control the mind of the customer if we behave ethically. That being said, the best in this business seeks to understand the human condition where it pertains to desire for our products and how these best fit their needs. Whereas a salesperson will use rapport and focus on customer emotion, F&I must determine customer need and fashion a presentation around that. Dan Mason did a fine job in his article this issue about using word pictures the customer can see themselves experiencing. This works well because it invokes a time when the customer needed our product and didn’t have it. While we don’t want to use awkward presentation techniques, there are times when a gentle reminder of how important our products can truly be. Now, I’ve had many conversations with FIMs who believe they can actually control the situation with a customer. Even one who actually wrote on a social media page that no one leaves their office without buying something because they’re so talented. Now, I hardly believe anyone is that persuasive and it’s more than likely this person’s disclosure methods are questionable and chargebacks are probably high. “the difference between good and great at anything is often only a small amount of extra effort...It’s often that second or even third extra effort they exert that separates them from others on the field of play” So, if we’re unable to control another person’s thoughts, how can we become more effective? The answer probably lies in the finance manager’s ability to create a desire for our products. Because if we can’t they probably won’t buy it. This is where product knowledge comes into play and using that knowledge in a way that speaks to their particular needs. You see, the difference between good and great at anything is often only a small amount of extra effort. Think of some great sports stars you admire. It’s often that second or even third extra effort they exert that separates them from others on the field of play. Performing good is often acceptable and praised by the status quo so most of us dwell or at least linger there. And isn’t it easy to accept the praise of our bosses when we’ve had a good month knowing in the back of our minds we could’ve done better? That’s just fooling yourself. The real question is “How much more could I have done with just a bit more effort?”. Taking another run at a product or trying just once more could very well be the key that unlocks the door. I’ve told plenty of FIMs ‘the most important thing you can do is become a product expert’. Read every enrollment form and learn each benefit. I’d wager there’s plenty of you who don’t know things about the products you offer customers that might make that difference. While you may not be able to actually change their minds, you can most certainly rein in your thoughts. Commit to having more self-control when the deal isn’t going your way. I challenge you to put away your pay plan and start focusing on what’s right for the customer. How can we become better at this? Simple. Start listening with both ears like Dan Mason talks about in this issue. He describes the best a finance pro can do is master the art of customer care when administering F&I products. This is a winning strategy and anyone can do it. Talk less and listen more then adjust according to what you learn. Good luck and keep closing. 14

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