By Myril Shaw, Chief Operating Officer, Dealer Profit Services
Are you achieving 5%+ F&I Gross Profit on unit sales (for units of $150,000 or less)?
Are you achieving 7.5%+ F&I Gross Profit on the amount financed (for units of $150,000 or less)?
Are you selling Protective Products on over 70% of finance deals and over 35% of cash deals?
Do your “all in” F&I costs, including fully loaded personnel costs, credit pulls, processing, space allocations, etc. fall below 25% of your Gross F&I profits?
If your (honest, fully analyzed) answers to any of these questions, you are leaving money, and perhaps a consequential amount of money, on the table.
Your F&I Net Profit should be contributing over 40%, and sometimes over 60%, to your store’s overall Net Profit.
Why are missing any of the targets (or are you missing ALL of the targets)?
F&I is not magic – it is not an art. F&I is a regular, standard, disciplined process. Maximizing Reserve happens by asking. 100% of your customers should be presented with Protective Product options 100% of the time – and every customer, finance or cash, should be required to sign the “Optional Protective Product Disclosure” (also referred to as the “Sign To Decline” (the customer is acknowledging the products that they have been presented and which ones they accepted/declined.)
F&I Profit begins long before the customer arrives at the store with aggressive advertising that you offer “Competitive Financing” – make your store visible as a “one-stop shop” so that they are not inclined to shop their local lenders or credit units.
Your reasonably paid F&I Managers should reliably following the two core F&I Principals:
1. The Hippocratic Oath of F&I – “First do no harm. F&I should never cost the sale.
2. Aggressive and Graceful In Retreat – “You never get more that what you ask for the first time.” F&I Managers should maximize Reserve and Protective Product Profit on their initial offer every time and then they should know how to back away gracefully.
Never have these principles been more important than in today’s economic climate. F&I Profit becomes even more important as the number of buyers declines and the carrying costs on inventory increase. F&I Profit has, perhaps, never been more important.
There does seem to be a growing tend to try and make the F&I process just like it is in the automotive world – and make it an online process.
Buying any recreational vehicle is a lifestyle decision. The buyers are excited. They want a personal experience with human interaction so that they can talk about and feel the excitement for the purchase. Customers are not aware of the value of the various Protective Products – one selected though, it is very difficult to change their mind. It is the personal conversation/interaction that facilitates the profit and builds loyal customers.
If you are not exceeding the targets – we need to talk – we can help you make it happen!
2022 was interesting. Together, we will make 2023 awesome!
HAPPY NEW YEAR 2023!
We are here for you anytime at info@dealerprofit.com. GO HOLIDAYS – GO 2023!
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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