By Myril Shaw, Chief
Operating Officer, Dealer Profit Services
Any Dealer settling for less than 5%
F&I Profit on Unit Sales is doing themselves an expensive disservice.
Achieving this level of profit is
actually not difficult. It does require
commitment, discipline, consistency, and enforcement.
The starting point for consistently
achieving 5%+ F&I Profit on Unit Sales is to make the two guiding
principles of F&I success a part of the store culture. These principles are:
1) The
Hypocratic Oath of F&I – First, do no harm.
Nvere cost a sales in the interest of profit,,,make sure that the unit
leaves the store;
2) Aggressive
and graceful in retreat – You never make more than what you ask for the first
time. The training and the culture MUST
ensure that the initial offer to the customers maximizes Reserve and Protective
Product Profit. That said, there has to
be a plan and consistent process to walk back this initial offer when necessary
without making the customer feel as though they were being taken advantage of.
Once the two
guiding principles are entrenched, the path to 5%+ F&I Profit is
straightforward when the rules and techniques are taught and enforced. The rules are:
1) Advertise
financing very early, very consistently, very loudly, and very often. “Competitive financing available.”
2) 100%
of the customers get to the Business Manager/Finance Manager 100% of the time –
no exceptions. The Business
Manager/Finance Manager should be introduced to the customer at the start of
the shopping process – not at the end. Even
if a customer says, “I’m paying cash”, they still meet the Business/Finance
Manager to “ensure a delightful delivery process.”
3) Every
Cash Buyer is offered the opportunity and a reason to convert to Finance
immediately after selecting their unit.
“If you are paying cash, you must have great credit. Wouldn’t you at least like to see what your
options are and maybe save that cash for more fun in your lifestyle?”
4) For
Finance Customers, the customer is introduced to the process within 5 minutes
of completing their Credit Application.
5) All
Finance Customers are offered a complete Protective Product package 100% of the
time.
6) Finance
Customers are presented with payment and term and NEVER price or interest rate
unless/until they specifically ask.
With these
six steps, cash buyers should be averaging 2% - 3% F&I profit on the purchase
price. Finance customers should be
averaging 9%+ F&I Profit on the
amount financed. Together, these will
yield well above 5% F&I Profit on Unit Sales.
It’s not
hard – it just takes discipline. Start today.
If you have questions about the process/training
or if you just want help in seeing these results, we can help.
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.
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