A successful dealer and founder of a chain of used-car superstores recently announced his intention to do away with the F&I department in his dealerships. He stated: “The worst experience in the buying process is the F&I process. You have to ask yourself, ‘Is there any real value added by the F&I process for the consumer?’ NO.” This dealer’s solution? Eliminate the F&I Department. None of his dealerships have an F&I manager. Instead, salespeople use a computer system to handle the entire F&I process. He believes customers leave the dealership happier, with less hassle, and he saves having to compensate an F&I manager, increasing dealership profits and customer satisfaction. Mirror Finish Detail – http://www.mirrorfinishdetail.com.au
He’s doing the right thing. If you do not believe the products sold in the F&I office help customers, you should not have an F&I department. And if an F&I manager is not helping customers, there is no reason to have an F&I manager. Whenever the focus of an F&I manager shifts from helping customers to making a profit, there is no value being added in the F&I office.
This does not mean financing, credit insurance, vehicle service contracts, and investment protection packages do not have value. Nor does it mean these products do not provide vitally important protection for consumers at a reasonable cost. They do. It does mean that when a dealer or an F&I manager perceives these products primarily as a source of income, that is all they are: a way to make money, not a way to help customers.
Every business succeeds by helping people. Whether that business is a convenience store or an automobile dealership, whether it sells milk or sells cars, the success of that business depends upon its employees’ ability to help its customers…and do so at a profit. The same can be said of every department within the dealership, including the F&I department. If it is not helping customers, it is alienating customers and hurting the dealership, no matter how much profit it generates.
Editors Note: The views expressed in this article are those of its author and not necessarily those of AFIP or its members. Ron Reahard is the Training Manager of Gulf States Financial Services. Prior to joining Gulf States Ron spent 3 years as an automobile salesperson, 6 years as an F&I manager and 8 years as an F&I personnel development instructor for leading credit insurance and vehicle service contract underwriters/administrators. In addition, Mr. Reahard was one of the authors of the AFIP Certification Course curriculum.