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Exploding the 8 Myths of F&I

July 2005, F&I and Showroom - Feature

by Ron Martin - Also by this author

There has never been a better time than now to be in the F&I business. It is improving in a variety of ways, from technological advancements that will help you be more efficient to the more central role of compliance in the finance department.

Now is the time to change your paradigm toward selling F&I. You need to let go of stereotypes that limit income and instead, achieve extraordinary results through higher expectations.

Certain concepts are accepted as reality even if things are often not as they appear. This may be due to repetition or because accepting these ideas allows average performance to be rationalized. You need to let go of these myths if you’re going to make the transition to a different way of seeing the profession.

Some of the most common fallacies plaguing F&I professionals include complete reliance on the 300 Percent Rule, the belief that offering more products will guarantee more sales and reliance on the menu to achieve full disclosure. Some of my favorite myths are identified here.

300% Rule Guarantees Sales

I’ve heard many say that presenting 100 percent of the products to 100 percent of the customers, 100 percent of the time ensures success. Does it? Maybe if you add 100 percent enthusiasm. Without enthusiasm, or belief in what you do, the rest is fool’s gold.

Many F&I professionals who have mediocre performance say they definitely present all the products, all the time. They even point to the menu or the waiver they placed in the customer’s deal jacket as proof. Why were their performances still average? Because they didn’t perform the most fundamental ingredient of selling: transfer of enthusiasm.

This requires that finance managers have a core belief in what they are doing and the products they are offering. They should believe it would be a tremendous disservice not to make a genuine presentation of the benefits.

Successful F&I professionals are willing to approach the customer with the conviction of the value of their offer. They believe in the products so much that they actually own the products themselves. When they receive an objection to the product, they have the same level of commitment for their least favorite product as they do their most favorite.

More Products = More Money

It’s better to present fewer products that you sincerely believe in than a bunch that you just look at as profit opportunities.

Presenting more products means that you have less time to spend on the products you’re already selling. It’s difficult to present the value of eight products in the 20-25 minutes you have with each customer. What you end up with is a watered down offer of each, hoping the customer will pick a profitable package.

If you add a product that is a win-win proposition, that’s OK. GAP is a perfect example. Not too long ago, this was a new product idea that dealers had to consider offering and it has evolved into the fastest growing F&I product available. Why? It’s a win for the dealer in profit and a win for the customer in an excellent benefit at a reasonable price.

Before adding another product to your arsenal, make sure it passes the win-win test. Next, make sure you still have time to present all your products with enthusiasm. You might want to replace a product instead of adding one just for the sake of it.


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