I think Mike Jackson is on the right track with the new AutoNation Pledge (Comment, "Dealership financing is still customers' best bet," June 14), but I have a few suggestions.
It would be in his best interest to take a poster-size copy of the pledge and meet with the heads of the consumer groups and Department of Motor Vehicles investigators who are causing all the headaches at the AutoNation store in California's San Gabriel Valley.
Mike, don't be intimidated when you notice the autographed picture of Eliot Spitzer (New York state attorney general) on the wall.
After you explain your pledge to cap finance contracts at 3 percentage points over your buy-rate, be gentle when helping pull the heads of the people in your meeting out of the ceiling tiles.
You see, Mike, they want to cap dealer finance commissions somewhere in the $100-$200 range. On a 60-month contract balance of $25,000, probably pretty conservative today, the +3 percentage points dealer reserve is $2,100-$2,200. Even if you tell them you get only 75 percent of that with no chargeback, they're probably going to think $1,500 commission is still too much and fly right out of their seats.
You could tell them how a good F&I guy has to make $200,000 a year, and you need 3 points reserve to be able to pay him. I just don't think it will fly.
One other suggestion, Mike: When you post that pledge on the F&I office wall in the San Gabriel Valley store, you'd better post it in at least the 30 most common languages spoken in the valley. I read somewhere that your neighbor who sells all those Toyotas has salespeople who speak 34 languages. Just think what you'll save on wallpaper.