It is a division of the Staluppi Auto Group, headquartered in North Palm Beach, Fla., which ranks eighth in new retail unit sales nationally.
Staff Reporter Donna Harris spoke with Feuer, who heads the finance department for several of the group's dealerships.
Where is your emphasis: finance or product sales?
We have to make money on product sales because we're not really making money on finance. We offer eight to 10 different products on our menu and offer them on every deal.
But you're not overly aggressive about selling product.
In today's times, I'd rather have the customer afford the car and have a happy, repeat customer. Let's get the customer a loan and keep the customer happy and move on.
We are in it for the long haul. We want the customer back in three or four years.
How else are you promoting customer loyalty?
We want to make sure our finance managers are doing things sound and legitimate. We pick the best of the bunch and work with them and train them and make them better. A lot of people claim to be finance managers, and they shouldn't be.
What do you look for in a finance manager?
I look for integrity and intelligence, someone who knows what they're doing. You can tell in 15 minutes if someone pays attention to his craft.
How do you motivate them?
The pay is based on productivity and penetration and is weighted toward product more than finance. They make higher commissions by selling the right products: service plans, maintenance plans and GAP.
We pay them more for selling products that increase customer loyalty. We're not interested in selling customers 47 products and never seeing them again.
Do they always use the menu?
Two years ago we started using electronic menus, and it's made a difference. Now they're using the menu. If the deal doesn't have a menu, it doesn't get billed. So they use menus.
Electronic menus also help keep them honest. The customer has to OK the product. It's a wonderful thing.
Has the electronic menu system improved product penetration?
It's slightly improved my penetration. Mostly it improves integrity.
Where are advance rates right now?
That depends on the customer. The maximum is 115 to 120 percent of invoice. On average, lenders are advancing invoice to 105 percent of invoice.
Is that enough to sell aftermarket products?
In most cases, the advance is limited on after-sale products. They're a lot more difficult to sell. About 30 percent of the deals are maxed out, and you can't sell much. Lenders still let you sell service plans, maintenance plans, GAP and maybe Lojack.
What are the most promising products you sell?
I don't see any new products that are that promising. I'm not a fan of windshield product.
I like to sell tangible products like vehicle service contracts, GAP and maintenance plans. They're nice products. Customers get real value.
Tire-and-wheel coverage and dent-and-ding coverage are nice products. They have a purpose.
What is your product penetration?
Our service contract penetration is at least 40 percent. About 25 percent of the customers buy something else.
Has credit loosened up in your area?
Credit is nowhere close to what it was five years ago, but it probably shouldn't be. It depends on the bank. Certain banks without a doubt are horrific. But Capital One has been coming to the table and so have Wells Fargo and Chase Auto Finance. Toyota Financial Services is by far the best.
You've said lenders could go easier on subprime customers.
If someone has had trouble, he needs to bring something to the dance. If someone comes in and wants to put $2,000 down on an entry-level car at invoice, you should give them a loan. That's how you sell cars. We've gone from one end of the spectrum to the other.
Why should lenders take that risk?
The vast majority of people who fall into the subprime category are good people. They lost a job and had overextended themselves. Now they are back on their feet. They're doing the best they can to catch up.
Some banks are seeing high delinquencies now on A and B paper, and the marginal stuff is leveling off. Good people have been overextended.
How often are you seeing otherwise good payers in financial trouble?
On Long Island, 25 to 30 percent of the people we see are involved in some kind of mortgage modification. They may have bought a property for $400,000 and now it's worth $250,000.
You still have deadbeats who don't pay anyone. But there are a lot of good people with bad scores that are having a hard time.
