Selling F&I Today and Tomorrow

Sam D’Arc, chief operating officer of the Zeigler Auto Group, has a 360-degree view of  automotive finance and insurance.

Prior to joining the 35-store, Kalamazoo, MI-based dealership network with 2,600 employees in four states, he worked for an insurance company that’s an F&I services provider.

Two years ago he brought that expertise to Zeigler group, which ranked No.39 on the 2021 Wards Megadealer 100 with total revenues of $1.54 billion.

In a discussion with Wards, D’Arc talks about what makes a great F&I department, what to look for in a prospective F&I manager, and how that dealership profit center will change in the impending electric-vehicle era.

Read below for an edited version of the interview.

Wards: What makes a great F&I department today?

D’Arc: A good one delivers an extraordinary customer experience. Its people are trained to utilize technology to deliver that experience. They understand customer needs related to the product offerings.   

Wards: F&I is a major dealership profit center, but many consumer surveys indicate it can be a customer pain point. How do you reconcile that profit-pain point disparity?

D’Arc: It’s truly a pain point when there is lack of transparency. Good F&I departments, ours included, show the customer the path, make it as transparent as possible, and match customer needs with products that are offered. When those things align, it’s an incredible value to the customer.

Wards: Is that done primarily with a digital menu?

D’Arc: It’s a total experience. It’s a finance manager who is familiar with the products and how to offer them. It’s technology vis-a-vis the menu to deliver options to the customer.

Technology has done a good standalone job but has not yet done a perfect job completely on its own.

Wards: When you hire an F&I manager or promote someone to that position, what skill sets are you looking for?

D’Arc: We want someone with integrity who is teachable and trainable, who will follow a process and who understands the importance and value of representing the Zeigler name.

We just relaunched what’s called Zeigler University. It is a foundation Mr. Zeigler set up about a decade ago with a goal of delivering an extraordinary experience to every customer in the right way.     

Wards: What are some of the biggest changes you’ve seen in F&I over the years?

D’Arc: Oh, my goodness, there are a ton of changes. The technology is one. Getting technologies to adapt and play well together across multiple platforms is another.

There also is a wider variety of products and solutions available. For example, we had a ton of auto thefts across the Chicagoland area this past year. We sought a solution to protect our own (inventory) vehicles. We went with LoJack (an anti-theft GPS tracking system).

We realized that not only would it help us track our own vehicles and protect them from theft, but it also could provide value to the customer as an F&I product. So, it was a double benefit.

Wards: What F&I products are customers more receptive to these days? 

D’Arc: Depending on where you are geographically, LoJack is a deterrent and a huge focus right now. Service contracts obviously provide great value to customers by covering unforeseen repairs in this inflationary environment of increased prices.   

Wards: What is your vision of F&I in the electric-vehicle age?

D’Arc: The products will absolutely change. I don’t believe the value proposition will.

Again, us being well-trained as finance managers delivering an extraordinary experience will be the uniform point.

But those products will change. We’re starting to see VSC (vehicle service contracts) adapt to the EV market.

Our group just launched a product that meets EV needs. There probably will be other F&I products that meet individual and specific needs of vehicles propelled by batteries, including a product that covers the battery.   

Wards: Wouldn’t that be an expensive proposition?

D’Arc: Probably, at this point. The price of EV batteries is coming down, but right now they are expensive.

Wards: Can you sell F&I online, as opposed to doing it in person in the F&I office?

D’Arc: Absolutely. There are platforms that deliver that well.

But a lesson of the pandemic is that, although we thought customers might go 100% online, they still show a desire to come in and engage with us one-on-one. It’s a big purchase. There is a lot involved in buying a vehicle.

For customers who want to meet us at the dealership, we’re there 100%. We also want to be online to the extent that they want to be. Having a well-trained F&I manager is key to any process. It is a tremendous opportunity to provide online F&I information to customers before they come in and engage with us.