A Dying Breed

I have always said that F&I is the most prestigious job in the dealership. It is important that we never lose sight of the fact that it is a sales position, not just a clerical necessity. We are neither clerks nor the sales manager’s secretaries.

That’s why I despise when F&I professionals refer to themselves as “business managers.” It’s such a wimpy-ass title. Business managers are the grumpy heads of dealership accounting offices. F&I managers and directors demand a little more respect and prestige. And right now, they are being asked to adapt to cataclysmic paradigm shifts driven by new technology and regulatory pressure.  

There are two forces driving these shifts, and neither is going away. First, even though we are kicking and screaming all the way to the slaughterhouse, the Consumer Financial Protection Bureau (CFPB) will prevail in the end. Yes, finance sources will eventually have to standardize interest rates offered to consumers at every credit tier, probably without dealer markup or rate profit participation.

Yup, I’m talking about flat rate. Hey, we can stand in front of the freight train, but we’re not going to stop it.

Personally, I don’t think it’s going to be all that bad. It could even play right into the second paradigm shift; the consumer-driven push for a faster, more efficient transaction. See, when dealers evaluate their processes, F&I is often the scapegoat. Think about it. How often have you been asked why deals take so long to complete? Well, if we don’t have to spend as much time justifying rate, maybe we can dedicate more of our time to selling something that actually benefits the consumer.

You had better believe the bankers and vendors would agree. They are on a mission to simplify the process and eliminate paperwork by converting every F&I office in the land to digital menus and econtracting. I am excited to see these changes — up to a point.
On the surface, all this new technology sounds wonderful. The new menus look great on a computer or tablet, and vendors are producing some really cool videos you can use to explain F&I products to otherwise disinterested customers. We have everything we need to speed up and simplify the entire process, and more tools are on the way.

So, yeah, I’m all for electronic menus presented by competent F&I managers. But our industry is severely lacking in the precision sales and social skills required to pull it off. So those slugs doing F&I at your competitors’ dealerships will struggle to adapt to the changes.

But let’s not forget all that government-mandated and contractual paperwork, which can take up to half an hour to complete, even if we just print and sign them and don’t sell anything. The new technology will greatly reduce that time, but will it kill profitability?

It could be a disaster, but not for experienced professionals who understand that F&I is a sales position. I’m more worried about the youngsters who are being developed and promoted to the position. I know. I’ve trained a lot of young F&I pros who lack the skills to overcome objections and present the value of their products. They grew up on the menu and don’t how to sell past the first “No.”

And as we all know, F&I is essentially dead when selling is eliminated from the process.

Remember, finesse and persuasion are neither illegal nor immoral. So, yes, it’s OK to ask for the deal. Some F&I managers have indeed become clerks. They have lost or never learned how to present the features and benefits of each of the products and protections they offer on the menu.

Look, the only way the F&I department can retain its title as the most profitable department in the dealership is with quality training and dedicated management. Dealers and general managers need to demand profitability in that office and ensure that nothing and nobody gets in the way of it, including other sales managers. Remember, F&I is just a sales management position that specializes in finance.

There are a lot of vendors creating processes to speed up the department. But we have to insist they don’t compromise profitability, as there are more than a few vendors out there that appear clueless as to the dual purpose of the finance office.

Just don’t introduce yourself as somebody’s business manager. You’re an auto finance professional, and you should be proud of that. Until next time, keep those emails and social media messages coming.

Jim Ziegler is the president of Ziegler SuperSystems Inc. Email him at [email protected].