Why F&I?
Even now our industry has some dealerships that either do not have a dedicated F&I office or assign the F&I process to sales personnel. While it is important to respect each dealership’s culture, we must also recognize that the F&I process is specialized and should operate separately from the sales process for optimum efficiency.
Most dealership management teams want the sales consultant focused on the sale of the vehicle and designate the F&I manager as the professional who should complete the credit interview, secure the documentation, and complete all the direct credit checks required to secure funding.
Scoring the Deal
From a sales consultant’s point of view, every customer should represent an opportunity to make a sale. However, some dealerships have the sales consultants run the credit bureau for the sales managers. This practice is dangerous to the deal and to the dealership, as it places the main focus on the credit score, while most F&I professionals will agree the ability to secure funding goes well beyond the score.
The sales consultant’s knowledge of a low credit score can cost the store a sale. The challenge is to maintain the same level of enthusiasm with a low credit score as one with a high credit score. If you live and breathe by the numbers, you are missing opportunities. With some extra work, extra deals can be made.
Securing the Funding
When the rubber meets the road, a sale is only as good as the ability to secure the funding. Many lenders’ credit guidelines still employ the tier system. When a credit score is lower than 600, the educated professional looks beyond the score to determine what happened, when it occurred, and if the situation has been corrected. A credit interview, coupled with supporting documentation and a strong relationship with a loan underwriter can make the difference between a sale and lost time.
I do not believe that most people ignore their obligations. I do believe that many people simply do not have the savings reserve to fall back on during a major crisis such as a vocational or lifestyle change, relocation, or medical emergency. The quest is to find an affordable vehicle that meets the customer’s needs. Many customers will need to start small and work their way up.
Changing the Face Coach Vince Lombardi once said, “Fatigue makes cowards of us all.” When the sales consultant secures the commitment to purchase from the customer, the two negotiators have both reached their level of endurance. A change of face is needed for many reasons. Full disclosure of all terms is a prime reason; presenting non-tangible benefits is another. How can a customer make an informed choice without fully understanding the opportunities available?
To a sales consultant, F&I products and policies may seem like extras the customer does not truly need and thus jeopardize the sale. However, those “extra” policies are the very tools that prevent unplanned repair expenditures.
When the family budget is stretched, the customer is often forced to choose whether the limited dollars will go the make the payment or to repair the vehicle. A service contract makes the choice unnecessary. The service contract provider pays the major repair bill on behalf of the customer. The policies aid the customer’s credit-rebuilding efforts.
A new face can move the process forward without wasting time, while being 100 percent compliant with full disclosure practices. The F&I professional is key to securing additional sales via financing options and instrumental in providing additional benefits that ensure peace of mind for the customer and additional profitability for the dealership.
Making the Case
Communication is the key to a done deal. As a key player in the communication loop, the F&I professional will maintain an open line of communication among all parties involved in the deal — the sales manager, the sales consultant, the customer, and the lender. Everyone needs to be informed.
Should a dealer make room for an F&I department? Without reservation, the answer is yes. The time saved in the sales consultant day’s alone would be reason enough — not to mention the extra sales made possible by a strong relationship between dealership and lender(s).
Why F&I? Why, to keep profits high – of course!
World of Special Finance, September 2005, p. 36