F&I Is Not the Problem

Was there ever a generation that actually liked what happens in the F&I office? I don’t doubt the conclusions of all the studies that say Gen Y and F&I are fundamentally opposed. But can we just take a step back from the numbers before we start talking about eliminating the F&I office?

If you’re a dealer who has successfully combined sales and F&I roles under the "hybrid" manager title, good for you. But if I offered a service that was penetrating at a 77 percent clip, as noted by the National Automobile Dealers Association in its latest annual report, I’m not sure I’d be racing to eliminate it. That’s why I’m a little confused as to why some individuals in our industry are so quick to suggest that the F&I experiment has run its course.

Frankly, it’s a little disturbing to read that some of our industry’s supporters are ready to cut us loose. Maybe I’m a little too close to the issue, or maybe I just don’t like the idea of a couple of studies causing the elimination of a profession that has provided a nice living for so many hardworking people.

And if you think I’m overreacting, here’s a recent quote from a competing publication: "Consumers are saying, ‘Why do I need to go to the bank? Why do I need to go to the F&I department? Why not just go online at home, get your loan, go to the dealership and pick up your car?’"

The source of that quote was Tom Alexander, finance department chairman at Northwood University. In his defense, Mr. Alexander was merely restating the conclusion of a study he co-authored for the school, titled "How the Auto Financing Customer is Changing the Market." But come on, this is a school that dedicates a good portion of its students’ junior year to learning the F&I process.

Heck, Alexander’s own study showed that 53 percent of respondents said vehicle financing was more enjoyable than other financing experiences. Only 16 percent indicated that vehicle financing was their least enjoyable experience.

See folks, the F&I office has an image problem, not a process problem. We don’t sell dreams like they do on the show floor; we sell the realities of vehicle ownership. What I’m not hearing from these supposed "thought leaders" is that F&I managers don’t dictate how long their processes take; that’s the province of lawmakers.

But I’ll forgive Mr. Alexander for not taking the opportunity to defend F&I. I blame dealers. Maybe agents have done too good of a job, preventing dealers from really understanding what F&I managers face on a daily basis. I mean, this is the department responsible for keeping the dealership in compliance and off the radars of regulators. And that responsibility is getting even tougher in this new, heavily regulated environment we’ve entered.

I guess dealers’ silence is why some F&I pros out there aren’t racing to adopt the mobile F&I menu. Shoot, if everyone was gunning to eliminate my position, you can bet I wouldn’t make it easy. And unfortunately, the iPad could make it easy to adopt the hybrid manager concept. And that’s what’s upsetting, because the mobile F&I menu represents a chance to update the F&I office and maybe satisfy a few Gen Yers along the way. It would bring about a visual change, which is a lot more appealing than a complete overhaul of our processes.

Unfortunately, there are some people in our industry who view the mobile F&I menu as a chance to rid the field of the dreaded walk to the "F&I dungeon." But let me ask all of you hybrid manager lovers this question: Are we sure the mobile menu won’t reintroduce some of those old practices that tarnished our reputation almost 20 years ago?

I think the mobile F&I menu buys us time as we figure out our response to studies like Mr. Alexander’s. At the end of the day, he’s right: We do need to adjust to this new customer. My only contention with his statements is they could push F&I producers further behind the curtain. I mean, how many more credit crises and recessions do we have to go through to understand the importance of F&I managers? They’re not the problem, but they may be the solution.

What I’ve picked up from Mr. Alexander’s studies and others like it — not to mention an enlightening discussion at this year’s Vehicle Finance Conference — is that Gen Yers understand why F&I exists. But what I hear them saying is that they want to play a more active role so they better understand their responsibilities and their options. That chance to educate represents a real opportunity for our industry.