The F&I department generates the most revenue per square foot in most dealerships. And when an F&I manager takes vacation, quits or is terminated, dealerships must act quickly to keep the revenue flowing. Some dealerships turn to professional temporary F&I specialists, who help keep business moving without missing a beat.
One Delray Beach, Fla.-based company has placed F&I specialists in dealerships nationwide since 1998. F&I Solutions Inc., initially founded in North Carolina, started out doing overflow work for Resource Automotive, American Financial and JM&A Group representatives in the area.
“Things just took off from there,” says Frank Martin, president of F&I Solutions, which now operates nationwide.
The bulk of F&I Solution’s clients are independent agencies around the country. The agencies network with the company to provide the necessary finance and insurance resources to dealership clientele.
Most of F&I Solution’s contacts with dealerships are through dealer services providers or general agents that provide the dealership with service contracts, GAP and other aftermarket products.
While some providers or general agents have their own specialist program, they don’t always have someone available. That’s where Martin’s company comes in, helping to handle the overflow.
“Many agencies don’t have the resources to staff a specialist program, so they outsource that part to us,” he says. “When a dealership needs a finance specialist from our ‘financepool,’ either a representative from their dealer service provider calls, or if they’ve used us before, the dealer will call us directly.”
New clients are faxed a compensation agreement spelling out all the terms the dealership is responsible for, such as the expenses of airfare, transportation, accommodations, pay plan, when payments are due and dates the service will be needed. Once the compensation agreement is signed and faxed back, Martin makes travel arrangements for the specialists.
“We now have a client base of a couple of hundred agencies and dealerships combined,” Martin says.
American Dealer Service Corp., an agency based in Augusta, Ga., helps to service dealerships in Georgia, Florida, South Carolina, North Carolina and Tennessee. Roger Thomas and Robert Larimore, owners of American Dealer Service Corp., have collaborated with Martin for more than seven years. They turn to Martin for help with overflow work, training needs and implementing F&I processes.
“F&I Solutions has helped me train new specialists,” Thomas says, “and they also help me improve numbers on seasoned specialists.”
Thomas puts Martin in touch with his dealers, who also utilize Martin’s temp services. According to Thomas, the partnership provides his company many benefits, including not having to employ an on-site training staff.
“From an agency standpoint, the expense of carrying a trainer can be costly,” he explains. “The partnership saves me about $100,000 per year.”
When a Dealership Needs Help, Temps Keep Revenue Flowing
As a result of high turnover in sales departments within the automotive industry, about 75 percent of Martin’s business is filling in for an open F&I position.
“The perception is ‘the grass is always greener somewhere else,’” Martin says. “Most of our services are solicited because a finance manager has quit or has been terminated.”
There are, however, peak times of the year when dealerships need Martin’s help to cover vacation time, such as during the summer or on holidays. And, most of the overflow business Martin receives from some of the larger dealer service providers occurs because they are backed up sometimes a month in advance.
“Mostly we fill in at large dealerships when they run F&I training classes,” Martin says.
The primary benefit of utilizing a seasoned F&I specialist, according to Martin, is to positively affect the bottom line.
“We keep the dealership’s F&I revenue flowing. Some dealerships may feel that it is cost effective to use a back up from the sales floor to run the F&I department in the absence of a seasoned professional,” he explains.
But if a dealership averages four deliveries a day, and averages just a few hundred dollars per unit less than they normally average, it is costing the dealer significantly more than what Martin’s service costs.
“By maintaining or exceeding what the dealership normally does, we pay for ourselves,” he says. “We oftentimes generate more revenue for the dealership and the service provider than a back up off the sales floor would.”
Most dealerships have a ratio of F&I managers based on the amount of cars they deliver per month. Martin believes that a good F&I manager can be effective in generating an acceptable amount of revenue for 75 to 100 units per month.
“If a store that normally has two finance managers to deliver 150 units suddenly finds itself with only one manager, it is a prime candidate to use our service,” he says. “If a store only delivers 75 units a month using only one finance manager, it too may be a prime candidate for our services if its manager becomes unavailable.”
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Feedback: Temps Are Effective, Profitable when Short Handed
Martin has received extensive positive feedback about his program from dealers over the years. One dealership that has benefited from temporary F&I services is Burns Kull Automotive Group, based in Marlton, N.J.
Founded in 1970, the company operates eight dealerships in the Southern part of New Jersey with new-vehicle franchises of Honda, Toyota, Scion, Hyundai, Pontiac, GMC, Chevrolet, Cadillac, Kia and Subaru, as well as used vehicles. Currently, there are 14 F&I managers on staff.
“Our company has used Frank Martin and his company for more than seven years,” says Larry Kull, president of Burns Kull Automotive Group. “He and his staff provide a reliable professional option when we find we need immediate staffing in our F&I department.”
Kull says that the primary reasons for using the temporary specialist service include covering vacation time, training specialists or finding a short-term solution when someone leaves the company.
“We will also use the service when we have decided to increase staff pending the hiring and training of the new manager,” Kull says. “Frank and his staff can be counted on to maintain and sometimes exceed our results with good customer relations.”
Kull relies on F&I Solutions to:
• Maintain or improve the performance at the dealership being served.
• Utilize the F&I MenuVantage system to ensure proper disclosure compliance.
• Provide dealership customers with excellent service, establishing the confidence needed for high CSI.
According to Kull, the temporary finance specialists always perform as industry professionals and produce quality work.
Goal Is to Maintain or Exceed Production Levels
Specialists can be called in to help out for a few days or up to several months. The average assignment is about three weeks, six days a week. Although F&I Solutions provides service subject to availability, it has been known to have someone sitting behind the desk by the next day.
Tracy Leatherwood, who has worked with F&I Solutions for more than six years, relies on his 15-plus years of experience in the finance industry during his temporary dealer assignments. Before joining Martin’s team of F&I specialists, he previously worked for mostly GM dealerships.
Leatherwood is currently on assignment in Knoxville, Tenn., at West Side Honda. While his current assignment is projected to last four to five weeks, his average length of stay at each dealership is three to four weeks.
Leatherwood’s goal while at Westside Honda includes holding the fort down until a new F&I specialist is hired, as well as helping to train the incoming specialist.
“My goal is to exceed the customers’ and dealership’s expectations,” Leatherwood says. “Our reputation is to make it happen.”
On his current assignment, Leatherwood has exceeded the performance of the previous manager by more than $200 per car. And while he handles both sales and necessary paperwork, the emphasis is on making sales.
“Income is of course critical,” he says. “So penetration levels and PDR are very important.”
Leatherwood says the key to his success is acclimating quickly to his new surroundings and getting down to business.
“There are different computer systems and title and registration laws in different states,” he says. “Some employees are a little wary at first, but then they get to know you and see that you are working hard for the business.”
As Leatherwood becomes familiar with the different dealerships, his assignments grow increasingly easier, he says. “If you’re thrown into the deep end, you’re going to sink or swim. I’ve always been able to swim.”
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Specialists Bring Experience, Compliance to Position
The process of finding a temporary specialist is simple. Once F&I Solutions is contacted for service, it acts as an agent for the specialist.
Reference checks are performed on all specialists and they must have a minimum of five years of F&I experience. They must demonstrate the ability to quickly adjust to any dealership, as well as be proficient on ADP and Reynolds and Reynolds operating systems, among others.
“We do not tolerate unethical business practices, and we require menu selling on every deal,” Martin says. “We have policies and procedures that are based on laws and ethics that we support. And, we are members of AFIP as well as AIGA."
F&I Solutions advocates that all products be presented to the customer, without exception. The company’s compensation agreement requires that the specialist provide a detailed report of the work provided and an invoice on the following Monday.
The dealer then has three days to audit and overnight a check to F&I Solutions’ billing office, where the specialist’s compensation is then overnighted to him or her.
Goal Is to Help More Dealers and Agents in the Future
Having seen all sides of the automotive industry — from Toyota sales representative to sales manager to F&I manager — Martin saw a need for emergency F&I solutions. While sometimes having to work “two weeks a week” as a finance manager, he finally decided to strike out on his own and contract out his abilities and those of other specialists.
Since creating F&I Solutions more than eight years ago, Martin has brought relief to many dealerships, who have found that counting on temporary finance and insurance specialists during a time of need positively impacts their bottom line.
And according to Martin, he sees a growing need for the services he and others in the field provide.
“When the dealers call on us, they are in a bind. We turn out to be an effective and profitable solution to their dilemma,” Martin says. “Considering there are approximately 25,000 franchise dealerships, I don’t think we have begun to scratch the surface yet. The potential is enormous.”
For more information on F&I Solutions, visit www.fandisolutionsinc.com or call (866) 731-7606.
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