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4 Reasons to Keep ’Em Separated

Industry insider warns dealers to resist calls for combining the roles of sales and F&I. He says the two departments must remain separate components of a shared process.

February 2014, F&I and Showroom - Feature

by John Lovin

Henry Ford used the assembly line to mass-produce his Model T in the most efficient manner. His system produced highly skilled workers in every area of production in his factory. For the last century, the assembly line has become the model for factories around the world. And for the last 40 years, car dealerships have adopted a similar system when structuring their sales operations.

In recent years, there has been talk of merging sales and finance by having the salesperson complete the entire transaction. The theory is that this is a more customer-friendly approach that will also cut down on transaction times. Here are four reasons why this theory is flawed and why the hybrid F&I experiment is doomed to fail:

1. Decreased unit sales: Salespeople are goal-oriented people. If their income is supplemented by finance income, their motivation to sell the next car will decrease. It’s human nature.

2. Decreased customer satisfaction: Most salespeople are not very detail-oriented. They are social by nature and the detail required to complete paperwork is not in their DNA. And nothing is worse than having sold customers return to the dealership to sign additional paperwork, which is bound to happen under the hybrid model.

3. Decrease in product knowledge: Salespeople should be product knowledge experts on the vehicles they are selling. They need to constantly hone their craft. They also need to be product knowledge experts on the competition. Adding finance to their responsibilities will decrease the time they can devote to research.

4. Decrease in finance income: A vehicle transaction can take as long as three hours to complete. Do you really want your salespeople to be chained to the customer the whole time? The chances of a quality finance presentation with a complete explanation of features, advantages and benefits are slim. And what if the customer offers to buy the car if the salesperson will throw in the warranty? That is a situation you do not want to create.

Searching for Answers
Many experts agree that something must be done to make the car-buying experience more customer-friendly. I’m not saying they’re wrong; I just don’t agree that combining the roles of sales and F&I is the solution.

So what do we know? We know that today’s consumer is more educated, with 80% of them doing some sort of online shopping before actually going to a dealership. We also know they don’t like the current sales process. So what is the answer? How can we improve the sales process and increase customer satisfaction? Here are a few best practices that are working throughout the industry:

• Improve salesperson training: Most customers know you can’t fit a $50,000 vehicle into a $400 payment. Still, we must train our salespeople to coach their customers into purchasing a vehicle that fits within their budget. If nothing else, this approach will speed up transaction times.

Train salespeople on the proper turnover to finance: Salespeople spend a lot of time with their customer, which means they’ve developed rapport and credibility. What they need to do is transfer that connection to finance by endorsing the finance department and the products it offers. The salesperson’s job is to move the metal; it is the F&I manager’s job to move the paper.

• Finance and sales put the deal together from the first pencil: Many successful stores have their finance director and sales manager share offices. They structure the deals correctly the first time. They also understand that the old days of writing up the deal with an advance of 180% and submitting it to every lender, hoping one will be asleep at the wheel, are over.

• Finance needs to meet the customer immediately: Let’s say a customer has agreed to purchase a vehicle, but the F&I manager doesn’t show up for 20 minutes after the deal was handed to him. Would you wait that long to get to the cashier at Best Buy?

• Finance needs to conduct a customer interview at the salesperson’s desk: There are multiple reasons for this. The first reason is because that is where the customer is comfortable. Second, it is the best way for sales to transfer the rapport and credibility to finance. And lastly, finance can qualify the customer for finance products when and where the customer is comfortable.

Completely restructuring the sales process is not the answer to what consumers want. What’s really needed is a closer working relationship between sales and F&I. And when that happens, the better the experience is for everyone involved — especially the customer.

John Lovin is vice president of Chrysler Capital Consulting. Email him at


  1. 1. Rebecca Chernek [ February 13, 2014 @ 07:02PM ]


    I absolutely agree 100%! "What the customer wants is a closer (a seamless process) between sales & F&I"! Let's bridge the gap between the departments- once and for all! A transparent sales process that supports the customer and dealer winning!

  2. 2. Mick [ February 15, 2014 @ 07:11AM ]

    At Best Buy the cashier isn't arranging for you to borrow $40,000 to purchase your new gadgets.


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