DALLAS — EFG Companies and Northwood University have named Team Vigilance the winner of their 2016 Innovator of the Year competition. The three-person team was awarded $25,000, and could see their winning product developed by EFG for market availability.
Members of the winning team include Alec Bond of Lindin, Mich., Houston Huff of Tuscon, Ariz., and Lucas Myrhe of Austin, Texas. The team’s winning product, “401Karrs,” is essentially a down-payment savings product, according to the company. The product allows dealership customers to add as little as $20 to their monthly payment as down payment on their next vehicle. When they return to the selling dealership to purhcase the vehicle, the dealer will match up to 20% of the amount saved, or $1,000.
Since customers are required to return to the dealership where they made their initial purchase in order to take advantage of the money they’ve been saving and the dealer match, the product also acts as a customer-retention tool.
“Team Vigilance developed 401Karrs to address a concern among millennials and Generation Z — financial stability,” the company stated in its press release. “ … With 401Karrs, this new generation of car buyers will have a tool to help manage their money by reducing or eliminating their out-of-pocket expense by putting a down payment on a vehicle.”
The last part of 401Karrs involves a reinsurance opportunity for the dealer, the company stated. Similar to service contracts, dealers can participate in reinsurance on the 401Karrs product and accrue interest on the money set aside for the down payment. This, the company added, should balance out the dealership match and also has the potential to generate greater reinsurance profit.
Each year during Northwood's fall semester, the F&I Innovator of the Year competition pits six teams of undergraduate automotive marketing and management students against each other. Their objective is to build a new F&I product while earning course credit, with each team assigned a mentor. Team Vigilance's mentor was Craig Drew, general manager of Central Maine Motors Auto Group in Waterville, Maine.
"This competition offers students the unique opportunity to take their education beyond the classroom and individual dealership rooftops to create an industry impact," said Keith Pretty, president and CEO of Northwood University. "Each of the participating students will be able to learn from their experiences from this semester and apply them to their future sucess as leaders."
This year's contest was judged by an eight-member panel of F&I industry leaders with more than 100 years of F&I expertise. The contest winners were announced on Thursday during a ceremony at Northwood University.
"With changing market demographics, increased compliance, and an evolving dealership model, everyone is looking at how the F&I space will evolve in the coming years," said John Pappanastos, president and CEO of EFG Comapanies. "This competition exemplifies the need to develop new ways of capitalizing on these market changes by taking into account fresh sources of inspiration to meet new demands."
Originally posted on F&I and Showroom