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10 Fixes to F&I’s Biggest Challenges

"Control what you can control" is the usual answer to most problems. F&I expert shows you how to take control of the 10 biggest challenges F&I managers faced in 2010.

January 2011, F&I and Showroom - WebXclusive

by George Angus - Also by this author

Didn’t do as well as you hoped in 2010? Well, you’re not alone. There are plenty of valid reasons things didn’t go as planned last year, but each has a solution. To find it, you have to consider how you think and act. To help get you thinking and acting the right way, let’s count down the top challenges you faced last year and see if we can find a fix.

10. The lenders are capping all my deals and won’t let me sell any products.

The Cause: Given the credit crisis we just came out of, it shouldn’t surprise you that lenders are trying to limit their exposure as much as possible. The easiest way to do that is to limit your F&I products.

The Answer: What you need to do is keep a detailed log of the deals you were capped on. Be sure to note how much income was lost and present your findings to your dealer or general manager at the end of the month. The truth is, lenders do have some flexibility here. Sometimes a call or a meeting with your boss is all it takes to get them to loosen up. At the end of the day, lenders need your business, and they will only cap your products as long as they feel they can.

9. Half my customers are paying cash.

The Cause: Yes, interest rates are incredibly low, but you have to remember what the recession did to the consumer psyche.

The Answer: The key here is to work the percentages and offer those low rates to every buyer, every time. Sure, cash conversion percentages are low, but you will find that some will convert if they are offered a low enough rate. 

8. We’re selling too many cheap cars.

The Cause: Put simply, consumers today are buying out of need, not want. That means the cars you would have wholesaled two years ago are now your best sellers. Obviously, that doesn’t bode well for your F&I penetration and income-per-unit numbers.

The Answer: Make sure management knows how many of your total units were under, let’s say, $12,000. While you can’t alter your actual profit per retail unit number, you want to make sure management is aware of the impact those vehicles have on your numbers.

7. The sales department isn’t turning people over to me at the time of the sale.

The Cause: Doggone those salespeople, right? Well, you don’t run the sales department, the sales managers do.

The Answer: Remember, it’s all about money. As suggested in the capping solution, you need to keep a log. Every time someone isn’t turned over to you, make a note of it in your log. Then, at the end of the month, multiply those people you didn’t see by your average income per financed deal. Then show your dealer or general manager the potential income lost because customers weren’t turned over to you at the time of the sale. Believe me, the numbers will speak for themselves and the problem will get solved.

6. You don’t understand. Our customers are different.

The Cause: Every time I hear this, I know of a dealership down the road that is producing more — sometimes double — the F&I income per retail unit delivered.

The Answer: This is one problem where you are often the cause. The best way to solve this is through training, because there are customers out there who want your products — you just have to know how to present and deliver them.

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