Often a dealer's first reaction to poor numbers in the finance & insurance office is to place a classified help-wanted ad. While that might seem like an easy solution, it really should be the last resort towards improved performance.
Dealers should examine whether they have done everything to ensure that their staff has all the tools to perform at the expected level.
The most critical things a dealer should consider are as follows:
Get Aboard the Training Train
Have F&I managers undergo sufficient and ongoing training. While the “we-need-more-training” cry sometimes is an excuse, in today's F&I environment it cannot be viewed as anything other than an absolute necessity. Training these days needs to extend beyond product presentation. It must include regular compliance instruction and possibly even certification.
A dealer should expect their F&I providers to offer training, whether that is regular coaching or an extensive off-site course. It is the provider's interest, as well as the dealers, to promote F&I product sales, so this support should be available and delivered regularly. The more intense courses are usually the most valuable and involve an additional charge, but they can quickly pay for themselves with improved profits per vehicle from your F&I department.
Insist On Menu Selling
Your store should have switched to menu selling by now. Its usage should be mandated on every contract. However, simply having a menu may prove insufficient if it is poorly designed or does not reflect the dealership's sales priorities.
A menu that is merely a copied and tattered piece of paper (as opposed to one that can be easily modified based upon the customer) may not deliver a professional and individualized impression that is needed to generate the revenue goals that the dealer has set.
A menu is not a panacea, but the evidence is overwhelming on the impact that a well-designed menu and well-delivered presentation using a menu can have on F&I profits per vehicle retailed. Many vendors offer menu systems that help an F&I manager improve, if used the right way.
Maintain a Good Mix of Lenders
A mix of lenders enables the F&I department to deliver the maximum number of customers at the highest possible revenue.
While signing every lender agreement is a bad idea (there is often a lender out there doing something stupid) it is critical to have a good cross-section that appeals to the credit ratings of various customers.
With sub-prime lenders still not buying like a few years ago, finding different resources to support the special-finance business requires efforts that can quickly pay off for a dealer if introduced and implemented.
Sell the Right Products
Have the right F&I products. Your service contract provider should offer the programs and training that meet F&I needs and the business manager's requirements.
There are always new ideas and innovative solutions that are being developed that can help increase profit per vehicle retailed. While the fundamental F&I products are where the emphasis should generally remain, new ideas and products should not be dismissed without some examination and perhaps a trial effort.
Keep F&I Department in the Loop
Make sure existing sales processes support an effective F&I interaction with customers, sales managers and sales people. In many stores, F&I managers are not given the proper opportunity to interview customers in order to set up sales presentation.
Too often the F&I manager is greeted with a deal jacket and a warning from the salesperson that “This customer is in a hurry and isn't buying anything else.”
That isn't the type of turn that helps strengthen F&I profits per vehicle. The dealer must ensure that the F&I office and the sales desk work together instead of in opposition to each other.
If a dealership's F&I manager is consistently under-producing, then a change might prove best for both parties. But turnover costs aside, it makes sense to be certain that the manager in question has been provided with what is needed to perform at his or her best and at the dealer's expectation level.
Bryan Dorfler is a finance & insurance consultant. He's at firstname.lastname@example.org.