Thirty years ago, there were few F&I products in the market, but when Toyota shifted its manufacturer's warranty program, JM&A Group identified an opportunity to offer a new product to dealerships and consumers.
In 1986, Toyota replaced its 12-month/12,500-mile warranty with a 24-month/24,000-mile warranty. Most of JM&A's clients were Toyota dealerships in the Southeast, and at that time, credit insurance and vehicle service contracts were the two big F&I products.
"We were concerned about how [Toyota's warranty shift] would affect service contract sales for the dealer and for ourselves," said Mike Casey, group vice president of sales for JM&A Group.
JM&A conducted focus groups and asked service managers, F&I managers and dealers what product or service would benefit the consumer and the dealership. Those dealership staffers helped JM&A develop a prepaid maintenance plan the same year Toyota changed its warranty.
Casey can't say whether JM&A was undoubtedly the first to roll out a prepaid maintenance program, but "on a large scale, we brought prepaid maintenance to market."
"Everyone needs maintenance, so we knew that they were going to use it," Casey said. "We knew it would help marry the customer to the service department. They would come into the service department several times. The service was already paid for. They would get the service done. The dealership would build a relationship with the customer."
Service departments were wary of the product. They saw it as a discount to their services at that time.
But "dealers saw tremendous value in it, and we have had tremendous success over the years with prepaid maintenance because of it," Casey said.