Auto retailer Larry H. Miller Group of Cos. is expanding its proprietary F&I products to dealerships nationwide.
Last week the company began selling such products as extended service contracts, GAP, identify theft protection, anti-theft etching, prepaid maintenance and more to nongroup stores through its captive finance administrator, “Total Care Auto, powered by Landcar Insurance Services.”
Until now, the company has sold the products through its own dealerships in seven Western states.
The move echoes the strategy the company took with its captive finance arm, Prestige Financial Services Inc. Prestige Financial specializes in subprime auto loans for mostly franchised dealerships. It was founded in 1994 to serve the Larry H. Miller Group of dealerships exclusively, but Prestige Financial has expanded far outside that footprint, to 46 states today.
Larry H. Miller Group of Cos., of Sandy, Utah, near Salt Lake City, has 55 dealerships. The company ranks No. 10 on the Automotive News list of the top 125 dealership groups in the U.S., with retail sales of 49,548 new vehicles in 2013.
Last week, CEO Greg Miller appointed Bryant Henrie president of Total Care Auto, in addition to Henrie’s existing duties as president of Prestige Financial Services.
Henrie discussed the new strategy last week with Automotive News Special Correspondent Jim Henry.
Is this the first time Larry H. Miller Group has offered its in-house F&I products to nongroup dealerships?
We’ve had some one-offs over time, where Larry [founder Larry H. Miller, who died in 2009] was maybe helping another dealer with something. We’ve had some experience doing that. But they were one-offs; we were never seeking to expand outside the group, really. Maybe we did a small group with three or four dealerships, or one here, two there.
This sounds like what the Miller group did with Prestige Financial.
Prestige was created 20 years ago as a captive finance company for the Larry H. Miller Group of dealerships. We have branched out beyond those dealerships to many, many more. We have dealer agreements with something like 2,500 dealerships across the country. We have been funding outside dealers through Prestige Financial for probably seven to eight years.
To roll out F&I products, do you start in dealerships where you’re already present with Prestige Financial?
Really, what I’m being asked to do is to kind of mesh what we’ve done with Prestige with Total Care Auto. Given our dealer relationships across the country, we have the ability to present Total Care Auto to a non-LHM dealership fairly easily.
Dealers that are already using Prestige Financial that have a good relationship with us, they’ve been doing business with us for years, that’s our foot in the door to do business. That’s the easiest place to start. They know us, and we know them.
Do Larry H. Miller Group dealerships have to use the Total Care Auto products, or can they choose?
They are not allowed to choose. They may all use our products, but we pride ourselves on being cost-competitive, product by product, with the market. And our service far exceeds what anybody else can provide.
How will it be to compete head-to-head in the marketplace?
It’s not an easy thing if a dealership’s in bed with [another vendor]. It’s not easy to step in and get them to change to somebody else. What dealerships always want to know is: “How are you different?”
Our hallmark is that Total Care Auto has been doing it so long with one of the premier auto groups in the nation [that is, Larry H. Miller Group]. The service Total Care Auto renders to the dealerships is fantastic. Total Care Auto doesn’t take it for granted; they know they have to provide the service.
You don’t become the 10th largest auto chain in the country by happenstance; you do it by selling cars, and the ancillary businesses that you own and you have control over, those are crucial to the success of a car dealership these days. You know what your stores need, you know what’s being asked for. You know what are the value-based products that enhance the ownership of a car.
