At Rick Case Automotive Group, selling aftermarket products to lease customers is not just a big deal, it's a matter of survival.
That's because at some of its 16 stores, leasing can account for 70 percent of business, says Randy Horton, national finance director.
Products the group sells to lease customers include SkyLink, a GPS-based antitheft product, and exterior-finish products such as EnviroGuard, made by Cal-Tex Protective Coatings in Shertz, Texas.
Rick Case Automotive Group of Fort Lauderdale, Fla., sells Acura, Audi, Fiat, Honda, Hyundai, Kia, Mazda and Mitsubishi vehicles in Fort Lauderdale, Atlanta and Cleveland. It ranks No. 28 on Automotive News' list of the top 125 dealership groups with retail sales of 16,733 new vehicles in 2011.
Horton, 49, talked about the group's push to sell products to lease customers with Special Correspondent Jim Henry.
Q: What's big for you lately in F&I?
A: Leasing is coming back. We do a lot of leasing. For us to survive, we have to be able to offer lease customers something they qualify for. ... Some of our stores are 70 percent lease.
That's typical for South Florida, isn't it?
Most markets it's more like 35 to 45 percent penetration. In some markets it's a tremendous focus. It varies by market and by brand. We have six Hyundai stores, and for the first time ever they are doing a lot of leases.
What do you mean by products that lease customers qualify for?
Lease customers don't qualify for GAP. They don't qualify for service contracts. Most leases come with GAP, and they're not going to keep the car long enough to be interested in a service contract. For leases, we do offer a service contract, but it rarely makes sense unless they know they're going to buy the car at the end.
What about antitheft?
We offer several antitheft products. We offer LoJack, and we offer what amounts to etching, only you mark the frame and other places. It works like window etching. ... We just signed up about three months ago to sell SkyLink.
SkyLink is aftermarket GPS, right?
Right. Most people are already familiar with LoJack, and they know about the police tie-in, but not all markets have it, and not all police departments have a LoJack-equipped cruiser. The GPS works everywhere, or everywhere your cell phone works.
[Police in markets equipped with a LoJack tower can track a stolen car with a LoJack device. That includes most major urban markets, where stolen cars are more common, but LoJack doesn't work everywhere.]
Does that work with lease customers?
SkyLink, you can move from car to car to car, so yes. ... You only buy it once.
What else interests lease customers?
We are significantly up with the environmental-type products like EnviroGuard. You know, the exterior finish, those kinds of products. They did my car. It's black, and the first time it rains and you see the water bounce off ... it's the sort of a product where you instantly get a benefit out of it. Most F&I products, you can't touch and feel a benefit right away. With this, you do.
Would lease customers buy that since they're not keeping the vehicle?
When you're leasing, we say it's "like you're driving someone else's car" because you know you're going to have to turn it in. It's been a really successful policy with lease customers.
Is that a regional thing? The sun probably wreaks havoc with finishes in Florida.
In Florida we do get the rain, and when the sun comes out and dries it, you would end up with a polka-dotted car. In Cleveland, I always say, "Don't you let a customer out the door without buying it" because of the snow and the greasy, muddy streets. Let's face it; no matter where you live, I'm going to be able to find a reason why you need it.