Tony Wanderon is a serial entrepreneur, a former agent, current chief executive of National Auto Care and a private pilot. Agent Entrepreneur caught up with Wanderon to discuss his automotive industry career, what it takes to be a great agent and why parachutes are overrated.
In 1986, I was approached by Rick McMahon, who owned an F&I development company called ERJ Insurance Group. The dealership where I worked sold his warranty and credit life products. As Rick was growing his F&I business, he offered me a job to help him with a new relationship he started with Avis Car Sales, which required him to help open and train F&I in over 200 locations around the country.AE: What did McMahon see in a young Tony Wanderon? Wanderon: I think it was probably my desire, my understanding of and love for the business and how I presented myself. And I think he got me at a pretty fair price. AE: Did you enjoy training? Wanderon: The training part was fun. That went on for my first three years. In 1989, my son, Spencer, was born. I flew home from a two-week training trip in L.A., Hawaii and Seattle, and Christine had Spencer the night I got home — a month early, by the way. That’s when I came to the decision it was time to start building a business in South Florida, so I could be with my family more.
From 1990 to ’96, we focused on the South Florida market and, over time, we pretty much owned the market. We grew so fast. We soon had over 100 dealers, both big and small. In addition, I found a product that no one really had ever marketed and we put a lot of focus on developing and offering GAP under our ERJ brand. Around that same time, one of my first and best dealers, Dick Assmar, promoted us to his fellow Nissan dealers, which allowed us to grow that market. He also introduced me to the regional VP at Nissan and told them they should hire us to help them with Security+Plus, which we started in the early ’90s and continues today. I still feel that I owe much of my success to Dick for the way he supported me and our company.
That Nissan relationship brought us into national growth mode. We were writing 15,000 to 20,000 GAP policies a year as an administrator. In addition, our development business was growing at over 30% per year. At the peak of that growth, we became an American Heritage Life (AHL) agent. After a presentation I did for a large dealer group, the chairman of AHL, who had attended, came to me and said he wanted to acquire ERJ. Selling was not something that we were looking to do, but in 1997, it was the right time with the right company, so we sold.
Two years later, Allstate Insurance Company bought AHL for its workplace products. I really do not think that our division had any influence, one way or another, when they bought AHL, but I thought it was a great opportunity to prove that our business was a great one for them as well. For the first two years after Allstate, I remained in Miami, running ERJ. In 2001, I was asked to become president of the division. I accepted and relocated to Jacksonville.AE: I remember when you left Allstate. It was a big surprise. Wanderon: I like to say I’ve been married for 29 years and that was my only divorce. It was great to have a brand and I built that division and that company with a great team. I learned a lot and met some great people, but I would never go back to working in that type of environment again. I’m into an entrepreneurial, fast-moving organization. AE: So you started Family First Dealer Services. Wanderon: My sister, Courtney, and I started it in the dining room of my house. We hired our first employee and pretty soon there were five of us. We were doing a lot of consulting work and generating a lot of business, but our goal was to get back into being an agent-centric product provider. With my long history and clear success with GAP, we focused on that first and introduced our FFDS GAP in 2012. That year, I think we did less than $15 million in sales — which we were pound of — but in 2015, we exceeded $100 million and we now employ more than 100 people. AE: How did the merger with National Auto Care come about? Wanderon: In 2013, an opportunity presented itself with Trivest Partners. They had acquired National Auto Care, then known as NAC, and asked if I would go up to Ohio and give them my opinion of the organization. My opinion was this: Here was this company with some great people that really made me feel at home when I was there. They were also a very solid, customer-focused team, and that excited me. Finally, it opened my eyes to the fact that FFDS was missing an important product segment in vehicle service agreements.
NAC was missing some key things as well, but I knew that FFDS could fill in those blanks and that, together, we could both grow and support our agents better, now and into the future. So in November of 2013, we merged our two companies. As I said previously, our growth has been great and our agents have been amazing in supporting us the past few years.
Now, coming from where I came from, this isn’t “big.” It still feels like a family deal, but it is much more than that. And part of that is we have great agents who have been instrumental in our success. Our culture here is to not have as many agents as possible; it’s about having 50 great agents, one in each state and maybe two in the larger states. Unlike many of our competitors, we don’t compete directly with our agents. We’re here to build those partnerships. Having worked as an agent myself, providing that commitment and support probably means more to me than most.AE: Is the industry’s perception of agents changing? When the magazine and Agent Summit launched, there was a lot of talk about shaking off the image of the guy driving from store to store with a trunk full of products. You don’t really hear about that anymore. The focus is on business development, F&I training, compliance and reinsurance. Wanderon: There have always been great, good and not-so-good agents. I think that one of the qualities of a great agent is clearly understanding who they work for and that profits are reciprocal. Dealers rely on their agents to help them keep their businesses growing. A lot of the guys who worked for Pat Ryan are super-successful agents because they were part of a very professional training and support organization, and that is how we ran our agency as well.
In addition to training, back when I started, there used to be two or three products and maybe 10 to 15 companies marketing them. Now there are 50 or more products from which dealers can choose and hundreds of administrators and providers. Great agents understand the value that each product has to the dealer, the customer and the agency. Those not-so good agents frustrate me because all they do is sell price, which just hurts everything we have done to advance the industry’s reputation.
But we have to hold people and each other accountable. At the conference, we — and I mean everyone — is training and educating each other. That, I think, has been the greatest benefit of the conference. We really started to bring people together to share good, quality information. When you see other agents outside of the competitive environment, you see them in a different light.
Look at Joel Kansanback and Bill Kelly at Automotive Development Group. In 2015, they were our agency of the year. They were also my agent of the year with my prior company seven years before. Today, they are 10 or 20 times bigger, but they’re still providing quality service, that’s something special when you grow that much and keep up that high level of service. At the conference, other agents can go up to them and say, “How did you get here? How can I do that?” And they will tell you. That’s progress. It was not as open as it is today.AE: Those are good guys. I think they would be helpful, and I think they would say it’s a good time to be in the industry. Wanderon: It’s a challenging time. You have to do something to separate yourself. How do you compete against corporate jets, private yachts and big brand names? You show the dealers why all of that costs them money without any return. From my perspective, you can separate yourself by providing great service that fits the dealer’s needs and being persistent.
I once called on a dealer who said, “All you guys are pestering me to buy something. Come back after a year. If you’re still around, I’ll buy something from you.” I did go back. He didn’t remember me, but he kept his word. I signed him up for our warranty business. Persistence pays.AE: You mentioned there used to be only two or three F&I products, one of which was credit insurance. In our last issue, we interviewed agents and providers who are still having a lot of success with it. The voice of dissent was Brian Crisorio at UDS. He agreed it could be valuable but said there are too many other good products out there to make a hard push for credit insurance. Wanderon: Credit life and disability can be a great deal for the customer, particularly at a certain point in your life. But for dealers, licensing is an issue, and it is expensive, at least compared to other products. It makes a massive impact on customers’ payments. And I think it was regulated down to the point of being a challenge.
We wrote a lot of credit insurance, but personally, I’m more on Crisorio’s side. There are a lot of options outside the F&I office for customers who are underinsured. But some customers need it, and that’s why you have the menu. You don’t have to force them to buy anything.
That’s what excited me about GAP. I saw a product that would take care of the bank’s negative equity position, keep the customer from going upside-down and protect the dealer’s brand. Which one would I like to have personally? Clearly, GAP, and that’s what it often comes down to.AE: Do you believe Millennial car buyers make good F&I customers? Wanderon: I don’t look at someone and say, “You’re 20 years old. You’re different.” I say, “Are you smart or not so smart?” Our job is to offer the products that are going to help them. The service contract is a good example. How can a young customer afford a $2,000 or $3,000 repair when they’re struggling to make their monthly payments? And it has to be affordable. Can they afford another $10 a month? Probably. Could they afford $60 a month? Maybe not.
I don’t know why anyone would be afraid of an educated younger person who has questions. You need to offer products not for your own commission, but because the customer really needs them. If you can explain why, you have an opportunity.AE: Indeed. Last question, Tony: What do you like to do in your spare time? Wanderon: I fly. I’ve been working on it for a while. I got my license and bought the plane two years ago. We use it for short trips to visit family. I’ll fly up to Ohio once in a while, too. I like flying because it teaches you discipline. You have to go through your checklists and make sure everything’s right. AE: What kind of plane did you buy? Wanderon: It’s a Cirrus SR22. You may know it as the plane that has a built-in parachute. The former CEO of Walmart made a parachute landing last year. I guess it’s nice to have if something goes wrong, but you can’t get too comfortable up there. If you like the parachute because it gives you a false sense of security, you shouldn’t have it.