AutoNation Inc., the largest dealership group in the United States, has a number of pilot projects exploring new ways for the company to sell finance and insurance products. Among the pilots: one that combines sales and F&I at the management level and another that centralizes subprime loans in a separate department. AutoNation CEO Mike Jackson, 62, spoke with Editor Jason Stein about what the company has learned from some of the programs.
AutoNation exploring new ways to sell F&I
You've had a pilot program in which you experimented merging F&I and sales functions at the director or manager level. How's that going?
It may not be exactly what we ultimately do. We've learned a lot from it. We may have, in the meantime, other ways to get to where we want to be that are customer-friendly and more productive.
What have you learned?
The way we do it today is expensive and ripe for finding a new way. That we remain convinced of, but exactly how to do it? I couldn't tell you today that we've said, "This is it. This is what we're going do.'' But we're working on it. The pilot was very informative, constructive. … We learned a lot from it. It caused us to rethink a lot of things. Whatever solution we come up with, I can promise you will revolve around technology.
In south Florida you have a pilot program with all F&I activities with subprime customers going through a separate center. Will you expand that model throughout the company?
There's no question you have to offer subprime, and it varies from market to market.
We have markets where 50 percent of the clientele are subprime, and if you're not there with financial services, you're not going to do any business, period.
We're not going to go all the way into buy-here, pay-here. I don't see us ending up there. We've looked at that business. I have difficulties with it, charging 22 percent interest and cutting the car off when people don't pay. I'm not sure that's where we need to be.
We don't like to take contingent risk. We like to originate it, we like to find partners, and we like to find win-win situations. So we'll be there in subprime, and we'll find smarter ways to do what we've been doing.
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