The Hypocratic Oath of F&I Sales

Myril Shaw – Dealer Profit Services

The Fear: The F&I Process May Cost Sales

The Fact: The Hypocratic Oath Of F&I – Lifestyle F&I is NOT Car F&I

"If we put our customers through the whole F&I things it will cost us sales.  They will just leave and go somewhere easier."

Have you ever said that to yourself, said it to someone else or heard it from someone?  I'd lay money that you have!

Of course, F&I has been entirely poisoned by the auto industry…and that is sad.  Having come from auto, I know that was not the intent.  I did sadly observe the high-pressure, somewhat shady practices that now feared today, in many cases…and there is a big effort to recover in automotive today.  That said, it is true that many people have experienced the horror of F&I in car sales.  After spending hours with the salesperson, you are sent to the principal's office (also known as the Finance Manager) for a lecture on behavior and to understand your punishment – all in the name of loading up F&I revenue.

F&I for Recreational Vehicles is completely different.

In automotive, there are a couple of big differences.  First, buying a car, unless it is a luxury vehicle (and then the F&I experience is very different too) is not a lifestyle purchase.  It is a requirement.  Second, car dealers make virtually nothing on the unit sale.  Their margins on vehicles are in the low single-digit percentages and so F&I IS their profit…so they do everything they can to maximize the profit on F&I regardless of value.

Our industry is very different – and much more user-friendly.

First, no one "needs" a recreational vehicle – everyone in your store is making a lifestyle decision and a lifestyle choice.  Second, in general, there is, generally, solid margin on the unit.  Third, getting someone a solid finance plan with good terms helps ensure their ongoing comfortable enjoyment of their new purchase.  Finally, while selling optional protective products does have the beneficial effect of increasing your profit, it has the even larger upside of truly protecting your customer's worry-free enjoyment of their lifestyle purchase.

If everyone touching your customers at any level, and especially your F&I people don't have a 100% belief in the four points in the previous paragraph the then, to be blunt, need to be in a different industry.

The F&I sales process truly does need to be customer-centred with an honest effort to make it about lifestyle enjoyment.  That is not to say that profit must be sacrificed – to the contrary, being customer-centred means that profit flows in a stress-free environment.

F&I sales must operate entirely with the framework of two guiding principles:

1)    Be aggressive and graceful in retreat – You never get more than what you ask for in the first place – so make every effort to maximize profit – and then – as the customer hesitates, have a plan and a path to gracefully walk back the asks in a thoughtful, customer-focused way, so that you are always compliant with the second principle of this framework;

2)    Always follow the philosophy of The Hypocratic Oath of F&I sales – "First do no harm."  This philosophy says that selling the unit is job 1 and maximizing profit is job 2.  If Selling the unit requires Buy Rate and no protective products, make sure that the unit sells.

This framework practiced in a customer-centered, lifestyle purchase, value-creating environment will ensure maximum profit, unit sales and a great experience for everyone involved.

Dealer Profit Services, LLC can help.  Whether you want someone to take over your F&I and just drive profit to your store, help you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.