F&I managers have a difficult job. Not only are they expected to make sales that customers don’t always understand, but their jobs are constantly scrutinized by their employers and consumers alike. In fact, many dealerships are opting to change or even eliminate the F&I manager position completely. But, when dealerships emphasize the importance of the F&I manager, hire the right people for the job, and implement ongoing, innovative training, the F&I office can be a source of significant profit.
1 – Consumers Are Using Their VSC and Other Products More Than You Think
CBT Automotive Network: F&I managers are at a disadvantage compared to other dealership sales arms because consumers don’t always see value in an intangible product that they may or may not need and may or may not use. To increase sales and avoid chargebacks, F&I managers can inform consumers that vehicle service contracts (VSC) save people an average of $1,000 to $2,000 in repairs or parts replacement per policy. And 44% of these repairs involve technology such as navigation systems. In addition, 69% of people with a VSC use their tire and wheel coverage because alloy wheels and tires are expensive.
2 – The One Thing That Changes Everything in F&I
Digital Dealer: F&I has been the subject of a lot of controversy lately. And many dealerships are opting to drastically change or even eliminate the F&I manager position completely. So, how do existing F&I managers navigate this environment and stay successful? For many, the answer is insight. By gaining insight into the actions, thoughts, and behavior of their customers, F&I managers can embrace changes in the industry and better cater to customers.
3 – In F&I, Creating a Workspace for Top Performers is Key
Automotive News: In an industry with extremely high turnover, dealership employees are often treated like pawns instead of stakeholders. Hours are long and grueling and expectations are high. To reverse some of the negative stereotypes associated with auto sales, dealerships should nurture employees and give more opportunities to top performers in F&I. Because mistakes in the F&I office can cost dealerships more than a sale, hiring the right people for F&I is extremely important.
4 – How Much Dealers Earn on Finance And Insurance: Try $1,600
Forbes: Dealerships make an average of $1,600 per vehicle through F&I. But F&I has a disproportionate impact on overall profits. According to research performed at AutoNation, the nation’s largest auto retailer, F&I accounted for just 4.2% of revenues and 26.8% of gross profits. This profit figure was second only to the dealership’s parts and service department.
5 – Group’s Fresh Approach to F&I Training Pays Off
Automotive News: Brandon Steven Motors is improving F&I profit per vehicle by pitting F&I managers at the group’s nine stores against each other. During monthly training meetings, two managers at a time try to overcome an F&I product objection in front of their peers. The group then decides which manager made the better case. This type of transparent, peer-reviewed training provides feedback to managers and allows them to learn from one another’s sales styles. And the results have seen a boost in F&I profit per vehicle of more than $1,100 on average.
Check back next week for another Drive to Success.
