More than 40 years ago, Charlie Robinson dropped out of college to become a car salesman. When a team led by Pat Ryan -- known as the father of finance and insurance -- entered his Ford dealership in Milton, Mass., in 1975, Robinson learned about the profit he could earn as a dealership F&I manager, a little-known position at the time.
In 1980, after seven years in the dealership world, Robinson joined Ryan at his F&I product company, the Warranty Group, working his way up the ladder to become president of subsidiary Resource Automotive Inc. in 2010. The Warranty Group was acquired last year by Assurant, a provider of risk management solutions.
Robinson was also vice president of financial services at Asbury Automotive Group from 2004 to 2008.
At the end of this year, Robinson, 67, is stepping down as president of Resource Automotive but will stay on for two years to consultant Assurant's global auto business. In May, John Laudenslager, president of Assurant's global Vehicle Protection Services operations, became president of Assurant Global Automotive.
Robinson spoke with Staff Reporter Jackie Charniga last week about the Warranty Group acquisition, the evolution of F&I products and where the industry is headed.
Q: What was it like to work for Pat Ryan as the F&I department was just gaining traction?
A: We were a very small company, very close-knit. At Pat Ryan's company, reps could only wear a dark blue or a gray suit, a solid white shirt or a red or yellow tie. The way we looked, the way we acted -- we'd come into a dealership, and the dealer would say, "Here comes Pat Ryan's choir boys." The things that Pat had drummed into us had stood well in my career, and that's professionalism, integrity, do the right thing.
Which products did you sell when the idea of an F&I department was starting to spread? How has the offering evolved?
In the beginning, it was just credit insurance. We had one product to sell, and at the time, my goal as an F&I manager was $100 [in profit] per vehicle, compared to about an average of $1,300 or $1,700 today, depending on the market. So you can see the times have changed a little bit.
In the mid- to late 1980s, credit insurance was on the decline, and companies in that business knew that you needed to have other products. That's when we first decided to get into the service contract business.
Guaranteed asset protection came along shortly afterwards as a type of a replacement for credit insurance, and then all the other ancillary products that you see in the departments today just got added in time because they were a good idea, and they were a good value for the consumer.
How should F&I products adjust to changes in car ownership, with ride-sharing, autonomous vehicles and electric vehicles, for example?
Everyone in our space -- and it's a very crowded, competitive space -- continues to look for new products. But we all deal with the old issue of shelf space. We've changed the order of products a number of times in F&I departments, and we find that a dealership is really going to be productive with two to four products. It really depends on the dealership, what's most important to them and how they place the order of products on the menu. It's really the first, two, three and four that are going to get the highest attachment rates.
Some of the products currently in place out there today might need to be streamlined as we continue to look for what's the next product that can move up on the priority list with the F&I manager and provide benefit and a value to the consumer.
What F&I products would you eliminate to make room for them?
Etch is a product that's in decline. The automakers are starting to make their cars very theft-deterrent, so you question the value of alarm services and theft-deterrents to some degree in the future. All the other products, contrary to my last statement, it's nice to have them on the shelf because you never know when the consumer is going to ask for the product that you haven't sold to the last 20 customers, but this customer needs it.
The highest-value products of today are extended warranties. Cars, [along with repairs and replacements], have gotten so expensive. It really gives a consumer peace of mind. I would put service contracts first. Prepaid maintenance plans are popular, and they're good for the consumer because they have the peace of mind of maintenance paid for. But they are also good for the dealer because he knows he has built-in income ... and business back to his service departments.
How have the Warranty Group's operations shifted after the company was acquired by Assurant?
The future for our company has not been brighter in 25 years. We're much stronger as one company than we were as separate companies. Assurant is uniquely positioned to be the dominant force in our space moving forward.
At Resource Automotive, for the last eight years, I've been president and COO, been responsible for our national accounts division, resource agent group division, resource dealer group division and some other areas. It's been a wonderful journey; we were very lucky to exceed market growth by double digits every year for eight years. We're just in a unique position with the Assurant purchase. I feel like I've done all that I can.