What a difference a column makes

Jim De Luca
F&I Columnist

As an F&I trainer with over 17 years of experience, many people found it strange, if not offensive, that I wrote a column about the One Sonic-One Experience.

Published in the October 2015 edition of Canadian AutoWorld, my piece explored how I had mystery shopped Town and Country Toyota in Charlotte, North Carolina.

Before I explore exactly how things have changed since that column first ran, I think it is important for a little refresher on the topic at hand. The One Sonic-One Experience is the U.S. dealership group’s progressive and, to some, controversial plan to eliminate its F&I departments in favour of a hybrid process where an “experience guide” handles the entire sales transaction on an iPad.

There’s no negotiation, no sales manager interaction and no turn over to an F&I manager.

To facilitate these transactions, Sonic seeks out non-traditional salespeople for the position of experience guide. They prefer those that have a capacity to learn, posses excellent communication skills and function well in a team environment as opposed to having traditional automotive sales experience.

Sonic pays its experience guides a base salary and bonuses for achieving sales and F&I targets. The pay plan offers them an opportunity to earn well above the industry average, which has resulted in dramatically lower turnover and reduced HR and retraining costs.

In order to deliver vehicles in 45 minutes Sonic doesn't wait for finance approvals. Finance directors will “spot deliver” a car if a client has a good beacon score.

Sanjay Prakash, Town and Country Toyota’s general manager is confident about the store’s ability to get deals financed because they’ve developed an approval process that is what he terms: “Predictable, repeatable and sustainable.”

Sonic hasn’t totally eliminated F&I managers, it just realigned the process by putting the vehicle and F&I product sales into the hands of the experience guides; the approval process has moved to the finance directors.

The Mystery Shop
I wanted to experience their process for myself, so I went to Town and Country Toyota last fall.

The dealership is the group’s flagship operation in Charlotte and one of five area Sonic Automotive stores piloting the new sales system.

If you haven’t read the original piece I wrote, I’ll summarize if for you now: I was impressed. Very impressed.

My experience guide, Zigmond, was cheerful and welcoming. He offered me a tour and explained all the differences between this store and every other traditional dealership.

He highlighted the fact the process would be transparent and pressure free. He explains the Sonic True Price system, where prices are set using proprietary software along with J.D. Power and Polk data to reflect fair market value for that month. In my case, I was offered a Sonic True Price of $39,992 for a Toyota Tundra that was retailing for $45,528 at other stores.

We worked through the numbers on the iPad together. He didn’t leave to consult a manager and didn’t use a single pressure tactic to try and close the deal.

I eventually revealed whom I really was and was introduced to Prakash, the general manager, to talk further about the process.

The Column
I ended my column exploring how based on my experience, Sonic is on the right track.

“Perhaps, the One Sonic-One Experience is the way of the future for dealers with the courage to embark on a customer-centric, transparent and profit-driven process,” I wrote.

The feedback I received ranged from scathing criticism from F&I managers to overwhelming enthusiasm from sales managers, sales consultants and dealers.

On one occasion, I walked into a dealer’s office and saw the copy of Canadian AutoWorld opened to my column, highlighted and annotated on his desk.

The dealer said he loved the concept, but didn’t have the confidence in his team to engage in a similar process at that time.

I also published the column on LinkedIn with a “disclaimer” saying that I was not advocating the end of F&I, as it was never my intention to start a movement to do so.

It received over 12,400 views in a matter of weeks.

I also tweeted the column and it got the attention of a U.S.-based, weekly radio show for the auto industry called Auto Dealer Live. The show invited me to debate “Eliminating the Box” with a panel of experts at Digital Dealer 20 Conference and Expo in Orlando in January. The result was a vigorous and passionate exchange of opinions with some of the best minds in the automotive industry.

We agreed that the process wasn’t for everyone, but it’s a growing movement that’s gaining momentum.

The piece also led to an invitation to give the keynote address BMO’s annual F&I conference – if there was ever an occasion where I want to wear body armour, this will be it!

The Bottom Line
Central to any argument has to be facts to support your position. We can debate until the cows come home about what the sales and F&I formula of the future might entail, but I’ll let Town and Country Toyota’s 2015 numbers help shape your decision:

Town and Country delivered a record 3,152 units in 2015. Prakash says its market share of new Toyota sales grew from 12 per cent in 2014 to 27 per cent since it implemented the One Sonic-One Experience.

F&I profit is higher than its ever been.

I doubt that Sonic’s bold move will inspire many dealers to eliminate their F&I departments in the near future. Most of the dealers I work are reluctant to tamper with one of the most profitable departments in their dealerships.

Still, I am amazed by the controversy that my column generated. I wanted to inspire dialogue and what a dialogue it has been.

Jim De Luca is the V-P of Digital Road to a Sale Inc. He can be reached at 905-865-8734, jim@digitalroadtoasale.com, linkedin.com/in/jamesdeluca1 or on Twitter at @jimdelucaDRS.