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ldquoAre they happy or is something going on in their livesrdquo
<p><strong>&ldquo;Are they happy, or is something going on in their lives?&rdquo; </strong></p>

Check On How F&I Managers Sell and Feel

Kip Urban monitors departmental performance at car dealerships.

With F&I generating nearly 40% of a dealership’s gross profit, the department deserves management’s constant attention and tweaking.

Maintaining the status quo is the most formidable obstacle to better F&I performance.

Kip Urban is an agent for F&I Solutions Group, serving 600 dealers in the Midwest. His job is to report how well his clients’ F&I departments and F&I representatives are performing and where opportunities exist for them to do better.

Performance metrics he discusses with dealership personnel include:

  • Per Vehicle Retail or PVR by the department and by individual F&I managers.
  • Product penetration by the department and by individual F&I manager.
  • Vehicle service contract (and other products) penetration and margins by department and individuals.
  • Product/profit index, or number of products purchased per deal, which ones and at what margins.

“VSC penetration is the key profit product in F&I and it also promotes customer retention and downstream service revenue,” Urban notes. “But the product index is crucial. A finance department cannot rely exclusively on service contracts and GAP insurance. We need a healthy product index on a third product.”

Where this index isn’t healthy, additional training on products presentation and closing techniques will prove beneficial. In some situations, a personnel change may be in order.

Urban recommends F&I managers try to sell paint- and upholstery-protection products. They generate instant profit for dealers when sold and, unlike service contracts, GAP and other cancelable products, they are not at risk of chargeback losses.

His firm packages “chemical” sales with a windshield, ding and dent, and cosmetic wheel repair products. That’s “we live in a drive-thru world,” he says, referring to minor damage cars can sustain in lanes at fast-food restaurants, banks and other businesses.  

Selling this bundled chemical package is a new strategy, he says. “Where the sales process and pay plan are set up correctly for this, the dealers easily enjoy an additional $250 to $300 in PVR per unit.”

Chemical product sales, which generate profits for F&I, service and sales, can promote employee longevity. “Their sales can be an excellent way to retain good sales people by putting money in their pocket,” he says.

One of his jobs is to review completed deals looking for compliance risks such as unsigned menus. “We track these because a person not performing well or up to the dealership’s standards is likely a candidate for more training on how to execute deals in an ethical and compliant manner,” he says.

He advises dealers to evaluate F&I personnel on their attitude, too “Are they happy, or is something going on in their lives? You want to make sure they have a good attitude about presenting to customers.”

 

TAGS: Dealers
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