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By Myril Shaw, Chief
Operating Officer, Dealer Profit Services
Why
even do or offer F&I?
Boating
and RVing are lifestyle choices and are not living requirements. Being out on the water or in the woods is
Fun. Finding that breathtaking view or
having that stunning experience is Inspirational. That is the lifestyle that customers are
seeking.
What
F&I in the store does is enable Fun and Inspiration for your customers. While effective F&I is about profit for
the store – it is about lifestyle enablement and protection for the customer.
When
a customer needs or wants to finance to enter or maintain the number one issue
is NOT the interest rate, it is about overall payment and getting into the
unit. There is absolutely no reason for
F&I to be afraid of maximizing the interest rate in the first conversation in
the interest of maximizing profit. The
F&I experts just need to know how to walk that rate back gracefully when
the customer resists – some customers just like to negotiate, and others genuinely
have a local lender with whom they have a relationship, and who is willing to offer
a lower rate.
In
any case, the two key principles of F&I always apply:
1)
The
Hypocratic Oath of F&I – First, do no harm.
Never cost a sale.
2)
Aggressive
and Graceful in retreat – Always start with the maximum package and know how to
walk it back without insulting the customer.
The
“interesting” thing about the interest rate is that it must be factored into
the full package of both loan rate and protective product sales. Protective products are also very important
to lifestyle enablement and protection.
There may be times when it makes sense to adjust the rate down a little to
sell a bigger/higher profit bundle of protective products.
Protective
products are introduced and sold with stories, not features. Of course, the features will be described.
Examples
of those stories that sell are along the lines of the following:
“I
had a customer a few months ago who got this engine warranty. They broke down out on the lake. Their tow was covered. Their lift out was covered. The repair was covered and they were back on
the water in a week with only the $50 deductible out of pocket. Needless to say, they were very happy.”
“There
are some folks who purchased this pontoon and it has carpet. Not long after they got it, they were having
a party at their dock and someone spilled a glass of red wine on their caret
and it left a stain. Because they had
taken the interior/exterior protection, the carpet was restored to new condition
in just a matter of days.”
“The
Trophy Fishing Accessory Package saved the day and the dollars for my customer
when their depth finder stopped working.”
“It
was scary. These people had their boat
parked at their dock, and fortunately, they were not on it. Early in the evening, a drunk boater rammed
their boat and sank it. It was totaled. Because they had purchased the GAP Waiver, the
difference between what was owing on the loan and what the insurance company said
the then declared value of the boat was fully covered. Between the Insurance Coverage and the GAP
payout, they were able to go right back to their dealer and get a new boat without
being out of pocket.”
These
are not “feature” stories, they are “lifestyle protection” stories. These stories help make these products appear
invaluable and allow for very strong protective product penetration with
maximum profit.
F&I
does not mean cost to the customer, it means that they can comfortably enter and
sustain a truly Fun and Inspirational lifestyle.
As
a positive aside, done right, these products should provide the dealer with 5%+
F&I Profit on unit sales with Protective Product penetration rates of 60%+
to over 80%.
F&I
makes for good days for dealers and their customers.
Contact
us today at info@dealerprofit.com. We will help!
About Dealer Profit
Services
As a premier F&I
Services Provider, Trainer, Consultant, and Comprehensive Compliance Program
supplier, Dealer Profit Services, a member of the Brunswick family, 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 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 online, 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 how to use Dealer Profit Services F&I Delivery
Services – Click here. Get your Comprehensive Compliance Program here -
just click. Learn more by
visiting dealerprofit.com, email info@dealerprofit.com, or call (470)
326-0966.
