When Is Good Enough Not Good Enough For Your F&I Results – When It IS Worth Rocking The Boat To Improve Your Profit, Process and Protection!

By Myril Shaw - Dealer Profit Services


It is remarkable how often Dealers settle for "good enough".  Their comments go something like this:

·      Our results last year (or over the last six months) have been good (or good enough)

o   This description by itself says that the results were not great and could have been better

·      We don't think that it is worth "rocking the boat"

o   This means that change is scarier than improvement – while self-protective, this is pretty far off the path of continual improvement

·      The way we are doing things is okay – or – everyone is comfortable with the way things are going

o   This means that the process could be better and that comfort trumps excellence

·      I'm pretty sure that we are in compliance

o   This means that compliance has been thought about, probably, and that while the rules are unclear, the current position is good enough

You see where this is going.  Good enough is interesting, but is it really good enough?

Are you satisfied with where you are - really?  Are you content saying that continuous improvement is not a goal?  Are you satisfied that your processes are the best they could be?  Are you truly convinced that you are in compliance?  Are you really willing to say that your store is as good as it can be because you don't want to take the steps, and the risks, to make it better?

Yes, all improvement comes with risk – that is why it is called risk and reward.  What happens when your improvement attempts don't work out?  Well, there is a stumble – then you get up and make things even better.

Settling for good enough is settling for failing.  Remember, if you are not growing you are dying!

So, to the heart of the issue, how do you know if you are even good enough?

You are not good enough if any of the following are false:

·      You are making 7.5% Gross F&I Profit on the Amount Financed and/or are making 5.7% Net F&I Profit on the Amount Financed

·      You are making 2.7% Gross F&I Profit on the Amount Financed and/or are making 2.0% Net F&I Profit on Unit Sales

·      You are contracting 55% of all Finance applicants

·      You are turning over 100% of all buyers to your Finance Manager/Business Manager/Delivery Coordinator prior to finalizing any sale

·      You are reviewing performance on every deal – including communications and results

·      You have five (5) compliance manuals in each store (Red Flags, Disposal, OFAC, Patriot Act and Safeguard Rule), you have a Compliance Manager who has been trained and you have training capabilities

So…are you really good enough?

Continual improvement is not easy…it is necessary for survival.  Once you decide that you are good enough, especially when you are below the guidelines presented above, this is the clear indication that your future is bleak at best.

You can be your best…you should be your best…you should continually seek ways to improve and you should hold your vendors to the same level.

Good enough is not good enough…continual improvement without fear is the way to lead your organization!