Headquartered in Napa, Calif., AUL has taken the approach of focusing not just on one product, but on one market segment as well. The company sells vehicle service contracts (VSCs), with an emphasis on used vehicles, a strategy Jimmy Atkinson, COO for the company, believes has been incredibly successful.
Founded in 1990 by Luis Nieves – who is still the CEO today – AUL operates in all 50 states, with both franchised and independent dealers. “We target franchised and independent used car dealers through a national agent base, and we focus exclusively on VSCs. Our offerings provide solutions for new vehicles all the way through the higher mileage used car market,” said Atkinson. “In the last few years as more and more franchised dealers have retained higher mileage used cars, they have looked to AUL for a solution that protects their customers and allows them to add revenue for sales and fixed operations out of that portion of the market that they were missing before.”
He believes that while the company has always been successful, the explosion of the used market recently is in direct relation to the economic downturn. He also believes that the consolidation of dealers has also played a large roll in the growing need for a high quality used vehicle product.
“The changes in the last five years are momentous,” Atkinson noted. “Following the economic downturn, our industry lost a lot of new and used dealers. As new car sales declined, the franchised stores went much deeper into the used car space. This shift seems permanent, as franchised dealers are making money there and it is a hedge against future new vehicle sales declines. Fortunately the automotive industry started its recovery sooner than the broader economy, so our growth since 2010 has been terrific.”
Atkinson also sees the growth of the Internet as playing a major role in the used car market growth. It has become much easier, he said, for customers to find information about even the specific used vehicle they are considering purchasing, forcing the industry to get both more transparent and more creative at the same time.
“There are no secrets with the Internet,” said Atkinson, “and it has spurred our dealers to truly build value and learn to differentiate themselves in the marketplace. Also, F&I has become much more creative in customer presentations, again driven by technology through tablets and wireless devices.”
Finding Success
The Atlanta sports fan (“It was a long flight back to San Francisco after the NFC championship game last year!”) and father of several grown boys noted that he believes the auto industry is still the best in the world. The changes, even those such as the Consumer Financial Protection Bureau (CFPB) orders that will likely change the way dealers are compensated for originating loans – are a positive, which continue to push the industry to be better than it was yesterday. He sees those changes as a challenge to push himself and his company further.
“There are so many opportunities for people who are willing to work hard and take some risk,” Atkinson said. “There is an entrepreneurial spirit from the dealers to the agents to the administrators like AUL. It is truly an industry where you can create your own paycheck and accomplish your dreams.”
And to find that success, he said, an agent needs to be willing to take those risks, but also be open to learning from every opportunity and individual they come across. “I think that to be successful in the service contract or ancillary side of the business, spending some time in the retail side is critical,” he noted. “I have never forgotten the lessons I learned as a young parent providing for my family on straight commission, and I think that the experience combined with the empathy for those who do it today have paved the way for success in my career. Also, find a mentor and learn from them, show appreciation to all and find your own way to add value in all you do.”
