By Myril Shaw, COO, Dealer Profit Services
Your F&I Net Profit should be contributing as much as 50% or more of your store’s net profit. If that is not the case, your F&I Process needs tuning and your team needs training. F&I success is not an art, it is a science and your team can learn the science.
F&I Profit starts with two key principles:
- The Hypocratic Oath of F& I –
First, do no harm. Never cost the
team/store a sale. If it means $0
reserve and no Protective Products (or, at least, no Protective Product
profit), ensure that unit ALWAYS gets out the door;
- Aggressive and Graceful in Retreat –
You never get more than what you ask for the first time. The initial conversation with the customer
must include the maximum reserve and a full menu of Protective Products with maximum profit – then you need to know how,
when that sharp intake of breath is heard from the customer, to gracefully walk
back the offer until the customer agrees.
Typically, that process starts with, “Well, that was just our first
call, let me check and see what else we can get…”
3.
The team needs to understand the lenders so that reserve can be maximized. They need to understand the available protective products so that they can maximize profit and assemble effective and logical packages. The one product that should be offered on every finance deal with a down payment of 20% or less is GAP Waiver. It is an easy sales and can produce a great profit percentage.
Engine warranties are an important and effective profit driver – but the ability to sell them, but they be limited by the manufacturer warranty offered on the engine.
Accessory warranties are generally good to offer.
Interior/exterior protection is easy to tee up and once teed up is a fairly straightforward sales with great profit.
Tire and wheel/tire and road hazard would always be the last element of a bundle if it is included at all. There is not a lot of profit on either an absolute or relative basis.
Once the team is versed on what to sell, when, and how, the next critical element is monitoring results and holding the team accountable for continuous improvement in all areas of F&I sales. Targets should be set at 5% F&I profit on unit sales and 9%-10% F&I profit on the amount financed. Protective products and even financing should be offered to ALL customers, including cash buyers (80% of cash buyers are not paying with liquid cash, so there is a chance to convert cash buyers to finance.)
Once these targets are achieved, raise them…and repeat.
Practicing the science of F&I will make it a major profit
center at your store.
Dealer Profit Services - Driving Profit Through Fun and Inspiration
Dealer Profit Services, LLC, a member of the Brunswick family, can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model. As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be. Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you. If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too. Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.
