'Tis The Season of F&I Excellence – Review, Rejoice, Recharge, Renew (With New Targets) – What Are Your 2020 F&I Targets?

By Myril Shaw - Dealer Profit Services

Happy Holidays!  This is a great time of the year!

It is time to look back and see how this past year went.  It is time to rejoice and be thankful for all the successes, both large and small.  It is time to breathe deeply, relax from a long and sometimes challenging year and get mentally, emotionally and physically ready for 2020.  It is time to put your plans, targets, and goals in place for 2020.

F&I targets and plans are perhaps the most overlooked objectives at every store.  The most common sentence is, "Oh, we are doing fine in F&I."  What does "fine" mean?

Far too often, "fine" means that no one knows exactly what the numbers were or, even worse, the results are known, understood to be underperforming and that "less than the best" is okay – just because change can be scary. 

So, how were your F&I results in 2019?  Did you have targets going into the year?  How did you measure up to those targets?  Do you know?  Do you care?

Well, let's start with this…you should care.  Your F&I Net Profit should be contributing between 30% and 50% (or more) of your overall Net Profit when combined with Net Profit on Unit Sales.  If it is not, you definitely have less to rejoice about and a great opportunity for a new renewal.

What should you expect from F&I?

1)    A rock bottom minimum of 7.5% (and really it should be 8.0%) F&I Gross Profit on the Amount Financed;

2)    Contract at least 50% of applications received;

3)    Finance 45% or more of all Unit Sales;

4)    Sell Protective Products on at least 65% of all financed deals;

5)    Generate Protective Product profit of at least 1.5% of Selling Price on cash deals;

6)    Contain F&I cost to NO MORE than 30% of your F&I Gross Profit and the target should be 20%.

When you meet those targets, your F&I Net Profit on Unit Sales will be at least 3.0% and often will be closer to 4%.  Think about that, your F&I Net Profit should be contributing at least $150,000 to $200,000 per $5,000,000 in Unit Sales.

How happy will that make your 2020?

You can do that – is "good enough" really "good enough".  Is your F&I really doing "fine"?

Let's make 2020 the year of F&I Excellence!

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.