Settling or Excelling – F&I Performance Can’t Be “Just Okay”

By – Myril Shaw, COO, Dealer Profit Services

Settling or Excelling – F&I Performance Can’t Be “Just Okay”

For way too long, F&I performance has been a kind of afterthought, a bonus, if you will.  Especially among Marine and RV dealers where the unit margins are so high, F&I has often been feared as potentially costing a deal rather than sought as a major Profit Center at the store – perhaps contributing 50% of the store’s Net Profit.

It is time for that to change.

F&I performance must shift from “Okay” to “Outstanding”.

Now, F&I is NOT just an F&I Manager and an office.  Driving F&I excellence is an ongoing, all encompassing, store wide effort with three major components:

- A comprehensive, defined process from the moment the customer hits your website till they leave with their new unit

- The tools and knowledge to maximize F&I Profit

- Complete F&I Compliance processes to help ensure that not only F&I profits, but also other store profits, are protected in the event of some type of Compliance issue

Let’s start with the storewide, end-to-end process.

- Advertise your F&I capabilities on your website – offer a “Get Pre-Qualified” option on each piece of inventory so that people believe that they can come in and buy

- Advertise F&I with signs in your store

- When a customer walks in, very early in the process, have the salesperson introduce them to the Business Manager/Finance Manager with the phrase, “Once you have the unit you have fallen in love with, you’ll be getting with Bob to ensure that everything works to deliver a delightful experience”

- Place Warranty and other Protective Product brochures and samples throughout the store so that customers are prepped to purchase these products

- Make it a rule, and enforce it, that 100% of customers meet your Business/Finance Manager 100% of the time whether Cash or Finance – and that has to happen at the time they make a decision, not when they come in for delivery, or just a couple of days before that

This complete process maximizes the opportunity for F&I success.

Once every customer has been prepped and every customer is being turned over to F&I, the F&I team must be equipped for success.

- The process for receiving and processing Credit Applications must be as automated as possible – applications should be electronic, the process for submitting to lenders should be easy and virtually automatic (AppOne)

- The people should trained and scripted

o Cash Buyers

         Obviously, you must have great credit, wouldn’t you at least like to explore your finance options?

         Let’s talk about ways to ensure your enjoyment and improve the future value of the unit, since you will be wanting to move up in 4 – 6 years, through these protective products

o Finance Buyers

         Aggressive and graceful in retreat – you never make more than what you ask for the first time – start with full reserve and maximize protective products and then walk back gracefully

         Objective is to maximize F&I profit on EVERY deal – not just get the unit out the door

Once the dealer is seeing at least 25% - 30% sales of protective product to Cash Buyers and F%I Profit of 7.5% or better on the amount financed, they have achieved the starting line.  It is time for continuous improvement after that.

Finally, it is up to everyone to ensure that F&I and, actually, all profit is protected.  Identity theft and other fraudulent transactions are at an all time high.  You may think that “you are on the lookout” or that “we just aren’t part of that” or that “that just won’t happen to us”.  Well, it could.  It could even if you are not involved because a Class Action Attorney could drag you in because of a dealer down the street.

The good news is that the CFPB (Consumer Finance Protection Bureau) has said that when there are violations or claims, they will absolutely look at “good-faith” efforts to to be in compliance and to be doing the right things.  They will potentially reduce or even eliminate penalties.  In local proceedings, the ability to demonstrate “good-faith” may well change any conversation.

So in that light, there are steps to follow:

- Ensure that Compliance is a process and not an event – not just a Red Flags Manual

- Have complete and up to date Compliance Manuals: Red Flags; Disposal; OFAC; Safeguards; Patriot Act

- Document staff training

- Inspect and record inspection of premises for compliance

- Document regular inspections of compliance

- Have all training and documentation available for updates on-demand

Once you have accomplished this you will see a transition from “mediocre” F&I results to a place where F&I is a substantial contributor to you Net Profit.

Just okay is not okay – it is time to excel in F&I.

About Dealer Profit Services

As a premier F&I Services Provider, Trainer, Consultant, and Comprehensive Compliance Program supplier, Dealer Profit Services is about improving a dealer’s F&I profit and then providing the tools to ensure that profit is protected.  As a Service Provider, Dealer Profit Services provides complete F&I services and delivers the industry leading F&I Profit Results.  As Trainers and Consultants, we help dealers improve their in-house F&I departments.  Through the Comprehensive Compliance Program, Dealer Profit Services provides an on-line, on-demand, Compliance Program with documents, training and tools to make F&I Compliance a process that helps protect the dealer against potential risks from compliance issues.  Learn more by visiting dealerprofit.com, email info@dealerprofit.com, or call (470) 326-0966.