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September 2013, F&I and Showroom - Feature

by Gregory Arroyo and Brittany-Marie Swanson

F&I and Showroom magazine asked the individuals collectively leading more than 15 sessions slated for this year’s F&I Conference and Expo about the Consumer Financial Protection Bureau (CFPB), today’s Internet customer and tablet menus. They also offered their opinions on where most F&I processes go wrong.

George Angus

President

Team One Group

“Using Disclosure to Your Advantage,” Wednesday, Sept. 18, at 9:10 a.m.

F&I: Where do most F&I departments go wrong while working with a customer?

Angus: With us, it’s all about process. And our process is the result of research and trial and error over the last 20 years. For example, we do not conduct interviews. The key factor in F&I success is to install and maintain a process that is in compliance, produces top customer satisfaction scores and delivers top income results.

F&I: Do you think dealerships are prepared to lose dealer participation as a profit source if the CFPB has its way?

Angus: The dealers that rely too heavily on finance reserve will be the big losers. However, we have been working with our agents and dealers to change their focus to products rather than reserve to minimize the effect of lost revenue. Frankly, our top performers don’t stand to be hurt very much because the overwhelming majority of their income already comes from product sales.

F&I: What’s your take on tablet menus?

Angus: We have been working with the major players in this area, and while electronic devices may become a more important part of the F&I process, they are not there yet. How they will be used in the future will probably be much different than the way they are used now.

F&I: Can you offer any advice on how the F&I office can better engage sales and the Internet sales department?

Angus: The relationship between sales and F&I differs greatly from one dealer to the next. In our development, we ask very little from the sales department other than that they sell the car and provide a proper turnover to F&I. That makes developing the process much easier.

Tony Dupaquier

Director of F&I Training

American Financial and Automotive Services Inc.

“Stump the Pro,” Tuesday, Sept. 17, at 10:30 a.m.

F&I: Where do you see most F&I departments going wrong while working with a customer?

Dupaquier: As a department, they go wrong by not establishing a consistent ongoing process that they stick to.

F&I: Do you think dealers are ready in terms of their compliance procedures for increased scrutiny?

Dupaquier: For the most part, the dealers who are not compliant do not realize they are out of compliance. But overall, the increased scrutiny from the federal level should not be of any concern to the dealerships.

F&I: Do you think dealerships are prepared to lose dealer participation as a profit source if the CFPB has its way?

Dupaquier: I do believe the way dealerships are compensated for loan origination will change shortly. However, I do believe that the finance companies will do their best to fairly compensate the dealerships, which may increase profitability.

F&I: What’s your take on tablet menus?

Dupaquier: My personal opinion has not changed since this topic was discussed at last year’s conference. I have always believed that we should embrace technology and move forward with it. However, I do disagree with how many of the mobile menus are making it easy for a dealership to eliminate the business manager’s job function.

F&I: Can you offer any advice on how the F&I office can better engage sales and the Internet sales department?

Dupaquier: We have pioneered processes that integrate business managers with the Internet department. Some of the largest Internet departments in the United States are working our process.

Peter Chafetz

Vice President of Training and Strategic Deployment

Allstate Dealer Services

“A Trainer’s Take,” Wednesday, Sept. 18, at 11 a.m.

F&I: Where do you see most F&I departments going wrong while working with a customer?

Chafetz: From our perspective, most F&I managers unwittingly make their jobs more difficult by talking at their customers. This is the perfect recipe for “commission breath.” Once the customer believes your actions are motivated by purely selfish motives, they will naturally push back.

F&I: Do you think dealers are ready in terms of their compliance procedures for increased scrutiny?

Chafetz: A fair share of dealers have had an “I’ll take my chances” attitude with the current regulations. Today, that simply won’t fly. It appears that the CFPB will step in on any consumer finance transaction they deem potentially unfair. Items such as access to credit, costs of credit, presentation material and sales presentation wording, and potentially predatory product pricing may all become targets for the CFPB.

F&I: Do you think dealerships are prepared to lose dealer participation as a profit source if the CFPB has its way?

Chafetz: The loss of reserve income has been discussed for more than 15 years, but I believe now it’s on its last legs. Dealers may soon discover that the cost to defend their F&I practices may be greater than the income rate markups generate. Once the first lender moves to flat commissions, the rest will follow. To prepare, dealers need to make sure their F&I managers are well rounded, informed and, most importantly, effective. If reserve dollars drop, product sales will need to rise. Note I said product sales, not product gross profits.

F&I: What’s your take on tablet menus?

Chafetz: Mobile technology may be appealing to a certain segment of the buying public, but, in my opinion, it’s the belly to belly connection between the customer and the F&I manager that will make or break the transaction. Menus are tools designed to enhance the F&I manager, not the other way around.

Luis Garcia

Vice President of Sales and Income Development

Safe-Guard Products International

“Master the Menu,” Tuesday, Sept. 17, at 3 p.m.

F&I: Where do you see most F&I departments going wrong while working with a customer?

Garcia: The No. 1 problem I encounter day after day is the failure of F&I to work under a combined effort with the sales team. In many dealerships, these two departments work completely independently of one another and in doing so, lose countless sales and reinforcement opportunities.

My training stresses the importance of bringing the F&I and sales teams together. I have had the privilege of working with hundreds of dealers across the country, and the recurring commonality among the most successful is that the F&I and sales teams operate under a combined and harmonious effort.  

F&I: Do you think dealers are ready in terms of their compliance procedures for increased scrutiny?

Garcia: Unfortunately, I feel most dealers are not ready. Dealers have historically taken more of a reactionary approach to these types of changes; however, one of my ongoing training goals is to help dealers become more proactive so that they are ahead of the game. 

F&I: Do you think dealerships are prepared to lose dealer participation as a profit source if the CFPB has its way?

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