Seeing F&I Operations in a New Light
When managed well, the Finance & Insurance (F&I) department can be a robust profit center for dealerships. One of the keys to maximizing the potential of this department is to look at F&I in a fresh way. This starts with the sales process itself, which has sometimes been viewed by customers as being high-pressure and uncomfortable.
Consult with instead of sell
Many dealerships try to “sell” F&I products to their customers. Instead of selling to them, consult with your customers about the potential benefits of the products. Ask questions to help them determine if dealership financing or an extended warranty would be a good buy for them.
For example, some customers arrange an auto loan with their bank before they go car shopping, thus declining dealership financing. In this scenario, ask the customer about the rate and terms of their bank loan. You might be able to offer a better deal than what they’ve arranged.
Or you could ask customers how prepared they would be financially if faced with a major car repair. If they have limited resources to cover major repair expenses, you could explain how an extended warranty could be beneficial to them.
Also examine how customers are presented with F&I purchase options, starting with the F&I salesperson. Have this individual greet customers on the sales floor as soon as possible after the sale, instead of requiring customers to walk back to the salesperson’s office.
Some dealerships are even combining the vehicle and F&I sales jobs into one position. Here, customers work with a single point of contact to both finalize the vehicle purchase and discuss F&I products. This takes advantage of the fact that the customer and vehicle salesperson have already established a relationship, so the customer doesn’t have to start over again with someone new.
Next, look at your F&I menu. More specifically, ask yourself whether your salespeople are overly reliant on the menu to sell F&I products. Sure, the menu should play a role in the financing sales process. However, it’s up to your salespeople to engage customers and clearly explain the nuances of these products so they can make an educated buying decision.
Use visual aids
A common challenge of selling things like service contracts and gap insurance coverage is that these F&I products are intangible. Unlike the shiny car they just purchased, customers can’t see or touch financing and insurance products.
One way to overcome this challenge is to use visual aids that illustrate how these products work and their potential benefits. Coordinate with a graphic designer to create professional graphs, charts or illustrations that make it easier for them to understand these sometimes complex products.
Invest in ongoing training
Continuing education and training is vital to the success of any professional, including employees selling F&I products. A wide range of training programs exist for such professionals, including both online and in-person courses. Check with the F&I companies you use to see if they provide employee training.
Also encourage your F&I professionals to stay up to date on sales tips and techniques by regularly reading industry articles and other materials. Spending 20 to 30 minutes per day on this kind of independent research can yield big dividends over the long term.
Don’t miss out on the healthy profits you could be generating from a well-managed F&I department. Meet with your managers soon to discuss how you can improve their operations and boost your sales.