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Sales Driver

The Gross Killer

August 10, 2010

The age-old battle of sales vs. service conjures up fond memories of cars stuck in service, pre-delivery inspections (PDI) left undone, missing keys, and packing all those last-minute spot deliveries on the short-staffed Saturday crew. The stories can just go on and on, but what about the gross killer that’s right smack in front of us? I’m referring to the sometimes tense and abrasive relationship between sales and F&I.

Over the years, the relationship between F&I and sales has become increasingly strained. Multiplying regulations have changed the way deals get sent to the “box,” and the back-end grosses just aren’t what they used to be. I have to admit, I miss the days of simply writing payments in the 300s on a worksheet, getting a commitment and throwing that customer into the box so my F&I manager could work his magic.

So, what’s the beef? In working with dealers around the country, I have found that the general tension between the two departments can usually be attributed to one of two scenarios:

1. From the F&I manager: “The sales department gives away my rates and works deals to the bone, so there isn’t any meat left.”

2. From the salesperson: “The F&I manager is moving front-end gross to the back-end so he can make money.”

Any other issues are mostly superficial, such as, “The F&I manager takes too long” or “Salespeople don’t schedule deliveries properly.”

So, let’s focus on what I believe to be the two “biggies.” In most instances, I find that many salespeople don’t completely understand the role F&I plays in a dealership. That’s especially true when their pay plans don’t involve back-end gross percentage commissions. Some of the best dealerships in the country involve the F&I manager in the structuring of a deal prior to presenting a formal offer to a prospect. The mantra amongst all sales staff should be to go for maximum profitability. Unfortunately, that thinking gets thrown right out of the window in a salesperson’s self-induced desperation to get the deal done.

If your store utilizes multiple payment scenarios, does your numbers presentation automatically include payments with an extended warranty or other applicable after-sale items? If so, that type of pencil strategy maximizes total gross profit and has sales and F&I working together. If not, and you’re only including a point or two rate markup, then you’re ending up with a single payment with a down-to-the-penny quote, and a friendly note from the sales team that reads, “See if you can do anything with this.”

It’s perfectly natural for a salesperson to be concerned with the “me” factor, but it’s the “we” result that keeps the lights on, the advertising flowing, and everyone’s year-to-date income growing. The attitude shift is, let’s care about everyone earning a living, including the F&I manager.

When it comes to the relationship between F&I and sales, reason doesn’t matter. A F&I manager could never hope to have a great relationship with any salesperson if he or she knows that his or her front-end gross is now split with or moved in its entirety to the back end. Any experienced dealership manager understands that circumstances like bank approval caps and loan-to-value ratios can affect how much front-end profit is allowed and sometimes spur restructured grosses.

Unfortunately, no salesperson wants to hear any of that. This is what fuels conflict within the dealership and quickly takes sales professionals’ and managers’ eyes off the ball.

So what’s the answer? Communication. Now may be the perfect time for managers from all departments to realign their strategies to revolve around maximizing gross profit across the board. Make your salespeople aware of all the detail that goes into the F&I process. You might even consider cross-training your sales and F&I managers. That can help to improve strategies for deal structuring so that both departments win.

Stay focused on the sum total and don’t get emotional about individual deals. It’s just getting too expensive to do it any other way. Success requires partnership!

Cory Mosley is principal of Mosley Training LLC, a nationally recognized training provider focused on new-school techniques, products and services. E-mail him at


  1. 1. John Duffy [ September 28, 2010 @ 11:35AM ]

    Well said Cory

  2. 2. Jim Radogna [ September 28, 2010 @ 11:53AM ]

    Excellent article Cory.

    I would like to add a note of caution for less experienced personnel. In reference to your question "If your store utilizes multiple payment scenarios, does your numbers presentation automatically include payments with an extended warranty or other applicable after-sale items?", the staff should be cognizant of potential payment packing claims. It is important to always dislose the base payment along with the other scenarios.

    Again, well done!

  3. 3. Marv Eleazer [ October 01, 2010 @ 12:31PM ]

    Sorry I'm late to the party commenting on your fine article Cory however I do have something to say here.

    Your are correct in that it's natural for salespeople to always focus on the "me" factor. They aren't interested in whether or not the customer buys a VSC, GAP or even finances at the dealership for that matter. The reasons are simple. They're driving goal is to get the metal across the curb so they can enrich themselves monetarily and egotiscally. Nothing wrong with that.

    So how can we F&I pros reduce the friction and increase penetrations? In addition to the improved managerial communication you suggested I believe we can help by getting out of our offices. Build a little rapport, work with the desk managers and get more involved with the sales process. In short-become more of a team player. We CANNOT survive without them but they can sure sell cars without us.

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Author Bio

Cory Mosley

Dealer Consultant

Cory is a sales training specialist who brings a new-school approach to automotive retailing. Get his monthly take on the opportunities and challenges impacting today’s front-end departments right here at

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