The Value of a VADA Partnership: An Interview with Zurich

Recently, we sat down with one of our Team VADA Program Partners to talk about the value of a Team VADA Partnership. Doug Avery is the F&I Executive Sales Manager for Virginia for Zurich, N.A. 

So how is the relationship with VADA going?
Our partnership has exceeded my expectations in every way. The automotive dealers in Virginia are fortunate to have Don Hall and Team VADA at the helm. Zurich’s culture of high performance, ethics and total transparency match the VADA philosophy and business model. Both organizations are the best in their fields. We had to add to our staff in January just to handle the growth in Virginia.
VADA only partners with the best companies so what makes Zurich different from other F&I providers?
There are some dealers that simply want a company that will show up at the beginning of the month to see how many contracts the dealership sold, buy lunch and then disappear until the next month. We are not interested in being the “lunch guys” or maintaining the status quo.
We are an F&I Income Development Company that develops dealership’s personnel through a proven F&I process. The key to being a great F&I provider is how good you develop the dealership’s staff.  Any Zurich F&I Executive can structure or turn deals all day long for a dealer, but what happens when we leave? Our system eliminates that dependence. I’ve said to many dealers in my career, “Our system takes a below average F&I person and turns them into an above average manager or the above average manager into a superstar.”

What do you mean proven process?

Zurich is the only F&I company that teaches at the NADA Academy and our Streamlined Selling System is an NADA “best practice” for F&I selling systems.  Many dealers have attended NADA’s training program and have seen Zurich reps teaching the class. When we begin discussions with a dealer, we explain up front that we will accomplish three things:
  • Make your dealership more money
  • Increase your CSI 
  • Help you to remain legally compliant
It is one thing to make money, it is another thing to keep it and allow it to continue to grow. We are not a company that will make you a million dollars and get you sued for 2 million.  Putting more money in a dealer’s reinsurance program, maximizing the investment returns, and being complaint are more important to Zurich then sending someone on a trip.
You mentioned maximizing investment returns, what do you mean?
Our competitors want to emphasize what they have earned over the last 15 years; but, ask them how they have done over the last 3 years when the market crashed.  Zurich has delivered 6.68% for producer-owed reinsurance companies during the downturn. We are a company that treats our F&I partners’ money like it is our own. Our dealer’s investments have actually increased over the past 3 years at a rate above the prior 10 years.
Yes!  So a dealer who has a 40% loss ratio for VSC, GAP, T&W, and other F&I products now has reduced his loss ratio even more because of additional income from investment. I’ve seen this lower a loss ratio 10% to 15%. It’s amazing how quickly the returns add up when you cede 100% of the written premium every month.
Can any dealer take advantage of this type of return?
Yes.  From the store that sells 15 to 20 Extended Service Plans per month to the group that sells 3,000 polices per month. Zurich is a large global company, but we have a plan for every dealer in the country. It’s not “one size fits all” in reinsurance. You must know both the short & long term goals of the dealer/dealership group to be able to place them in the proper reinsurance account. Zurich offers more different types of reinsurance accounts than any other provider in the marketplace.
What kind of results should a dealer expect from partnering with Zurich?
That would depend on what the dealer wants or needs. We do extensive research and spend a lot of time with dealers before we began a business relationship with them. Not all dealers have the same wants or needs and we have to establish what they are before we can fulfill them in the proper manor.
Zurich believes that consistency in performance and accountability must be at the core of any business relationship. The things that are constant in every one of our partnerships is that the dealer’s needs come first, we put all of our promises or obligations to them in writing, and they will all be accomplished in an ethical and legal manner. That we do promise.  Production and PVR are only the first step, not the ultimate goal. 
We are in the stores training their personnel on products, sales, and legal compliance.  We meet with our dealers monthly to establish a game plan of goals and the way we are going to achieve it.  We then put it in writing and both sign it. These are all things that other providers do not do. We want and demand to be held 100% accountable.
One last questions; what should be a dealer’s biggest concern in today’s market?
I think there is more than one concern.  The past 3 years have shown us that anything is possible and we must prepare for the unexpected. Unfortunately, when the economy gets in this shape we see increased regulations and lawsuits.   Dealers are often the first to be targeted.
My top three would have to be:
FTC compliance – as of July 21, 2011 they have greater rule making authority over dealers.
Our current President and Congress have publicly stressed that regulations of automobile dealers is a priority.

Lenders ability to control/pressure the dealer’s Finance Department. Even though there are laws in Virginia to protect dealers, the new Dodd – Frank Act has changed everyone’s future.

CLICK HERE for information from Zurich on Dodd-Frank

The good news is Zurich can help eliminate a lot of these concerns.  We started training our clients in April about many of the new regulations.  By using our F&I Selling System, we can help increase your dealership’s profits, guide them through the legal compliant minefield, and maximize their profits through a solid investment strategy, and then return it to you in a great tax position.