DALLAS -

EFG Companies and Northwood University are collaborating again, this time for an F&I competition designed to “jolt” the industry into a higher standard of innovation. 

A new accolade to be held annually, officials highlighted the F&I Innovator of the Year program will pit six teams of Northwood’s junior and senior undergraduate automotive marketing and management students against one another to conceptualize and build a new F&I product while earning course credit. 

A panel of dealer principals, EFG executives and Northwood’s automotive program educators will judge each team’s business case in November. EFG Companies will award the winning team $25,000, and will develop the winning F&I product for the retail automotive marketplace. 

The company will also return a percentage of the product’s revenues to Northwood University.

Officials explained the competing teams will be tasked with developing a business case for their new F&I product. Each team will be assigned an F&I director as a mentor to act as a sounding board and guide for one hour per week. The students must research, rationalize and demonstrate the market viability of the new product, and it’s potential to facilitate F&I product sales in franchise dealerships.

In addition, the teams will keep video diaries of their progress, challenges, breakthrough and more that will be uploaded to YouTube each week like the update available at this top of this page. The competition will run from Sept. 7 through Nov. 13.

“Since the 1980s, F&I products have been developed from a dealer/F&I perspective outward, versus a consumer perspective inward,” EFG Companies president and chief executive officer John Pappanastos said. “The increasing compliance and customer retention pressure, and the challenge of appealing to a new and highly informed generation, have predicated the need for the industry to turn innovation on its head.

“These students represent a fourth of the U.S. population with $200 billion in annual buying power. Our hope is that other F&I providers will follow suit in finding new ways to innovate and drive value for dealers,” Pappanastos continued.

Organizers added the F&I Innovator of the Year competition will provide Northwood junior and senior students with a deeper understanding of F&I’s importance for dealer profit and customer satisfaction.

Jennifer Rappaport, who is chief marketing officer and president marketing services at EFG Companies, told SubPrime Auto Finance News during a phone conversation on Wednesday that program orchestrators are being careful “not to lead the witness” in terms of expectations from what kinds of ideas might be generated by the participating Northwood students.

“For all of us to think that F&I products will only be sold in an F&I office during the next 30 years is probably not an accurate statement,” Rappaport said. “What are the other areas within a dealership where a consumer protection product that has been traditionally been sold in tradition F&I offices? They may come up with a pure F&I office product. They may come up with something very different. They also might come up with a more showroom traffic-driving product.

“We’re just excited to see what they come up with and we’re not putting a lot of handcuffs on them because we really want them with fresh, objective non-jaded minds to think about this from a pure consumer experience and from what consumers find both relevant and valuable,” she continued.

Currently, EFG Companies estimated dealers generate 35 to 40 percent of their profit from the sale of F&I products. EFG added the pace of change in this area of dealership profitability is evolving rapidly due to continuing pressure on finance companies, and consequently, on the dealer’s finance reserve from the Consumer Financial Protection Bureau.

“This competition exemplifies the Northwood University philosophy of hands-on learning. It provides our students the unique opportunity to see first-hand how entrepreneurism and leadership can impact the industry as a whole,” Northwood University president Keith Pretty said.

“Through this competition, we are providing students with an up close and personal opportunity to assess the challenges facing dealerships today and create a product or solution that has never been done before, and can viably drive profit margin for a dealer,” Pretty added.

This project isn’t the first time EFG Companies and Northwood are working together. This spring, EFG taught Northwood’s inaugural reinsurance class at the university’s Michigan campus. The class included a two-part curriculum took students from the most basic definitions of traditional insurance (such as premium, commission, reserve and more) to an overview of reinsurable F&I products like service contracts.

“We started working with Northwood over a year ago, and we’ve just been incredibly impressed with that organization,” Pappanastos told SubPrime Auto Finance News. “Not only is it really the only accredited auto retail marketing management curriculum, but they have a class of students who really care about this industry. They teach a very entrepreneurial model. The more we’ve gotten close to Northwood the more impressed we’ve been. This is our opportunity to leverage some of the thinking of millennials that they turning out who will be the leaders of this industry in the future.”