At AutoNation Inc., the country's largest-volume dealership group, extensive training and strict processes seem to be doing the job.
"Knock on wood, we have very, very few" instances of fraud, AutoNation COO Mike Maroone said. "I would credit the training with that."
AutoNation's F&I staffers are trained and recertified every year, Maroone said. Store general managers go through the same training and certification. Maroone identifies the customer interview as a critical point. Employees ask questions to determine customer needs, getting as much information as they can to share with finance managers. Then finance managers ask their own questions and seek documentation.
"Anybody can be defrauded," Maroone said. "But there's a bunch of real basic things you've got to do, from getting the driver's license, verifying income, getting copies of payroll stubs. In cases of subprime, you're looking at getting copies of utility bills, so you could verify the residence." In some cases, a salesperson might go to the customer's house to help gather the documentation necessary, he said.
Because of the requirements for subprime customers, Maroone said, AutoNation dealerships often refuse to let such buyers take possession of vehicles before financing is approved. Anytime a situation has an element of risk, the store is supposed to take a deposit and keep the vehicle until everything checks out. "We have got an obligation to our lenders and our shareholders to make sure that everything is on the up and up," Maroone said.
Huntington Beach Chrysler-Dodge-Jeep-Ram's new diligence is paying off, Shaver said.
A few months ago, he discovered a $35,000 2014 Jeep Wrangler missing from the lot. The store called police, but they were slow to act. So Shaver's staff activated the GPS on the missing Wrangler, grabbed the extra keys and took off in pursuit. They found it parked inside a gated community, jumped in and drove off. Said Shaver: "We went out and stole our car back."
Jim Henry contributed to this report.